Green Markets - January 29, 2025
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
A federal judge temporarily blocked President Trump's attempt to freeze federal grants and loans as part of a broader review of government programs. The freeze aimed to align spending with Trump's recent executive orders, which focus on reducing progressive policies and increasing fossil fuel production. The ruling created confusion and panic among state governments, schools, and nonprofits reliant on federal funding. The administration has since rescinded the order.
Northern Trust Asset Management has announced its departure from two significant climate-focused groups: Climate Action 100+ and the Net-Zero Asset Managers initiative. The company explained that it is confident in its ability to independently manage risks and engage with portfolio companies on sustainability issues, without the need for group affiliations. This decision follows a broader trend of Wall Street firms pulling out of climate-focused memberships. The exodus includes major banks like Bank of America, Citi, Morgan Stanley, and JPMorgan Chase, alongside asset managers like BlackRock and Goldman Sachs. The withdrawals reflect a growing political divide and concerns over antitrust and competition laws, as evidenced by recent investigations led by Republican lawmakers.
Switzerland has set a target to reduce greenhouse gas (GHG) emissions by at least 65% by 2035, compared to 1990 levels, and submitted this commitment as part of its updated Nationally Determined Contribution (NDC) under the Paris Agreement. The country plans to achieve this goal primarily through domestic measures, though it may also use international carbon credits from cooperation initiatives. By 2050, the country expects to still emit about 11.8 million tons of CO2 annually, mainly from agriculture, industry, and waste sectors, requiring negative emissions technologies to offset these residual emissions.
Biofuels/Chemicals
A U.S. Republican lawmaker, Rep. Beth Van Duyne (R-Texas), has introduced a bill (HR 549) seeking to repeal the 45Z clean fuel credit, which is part of the 2022 climate law (Inflation Reduction Act). This credit provides subsidies for low-carbon fuels, incentivizing fuels with fewer greenhouse gas emissions. If the bill is passed, the repeal would be retroactive, striking the credit from the tax code after 2024.
Related Stock List(s): Biofuels & Chemicals Stocks
Carbon Capture
Taiwan Semiconductor Manufacturing Company (TSMC) has partnered with MTR Carbon Capture to address carbon emissions, deploying MTR's Polaris membrane carbon capture technology at its Taichung Zero-Waste Manufacturing Center in Taiwan. The system will treat emissions from the facility's solvent incineration process, with installation expected by the end of 2025.
Related Stock List(s): Carbon Capture Stocks
Compliance Carbon Markets (CCMs)
Japan is committing $70 billion to lead the global carbon credit market as part of its strategy to achieve carbon neutrality by 2050. The investment will enhance the country's carbon credit market infrastructure and foster international collaboration. A central element is the Joint Crediting Mechanism (JCM), which allows Japan to work with developing nations on emission reduction projects. This initiative also includes investments in carbon capture technology, renewable energy, and ESG-compliant measurement systems.
A senior lawmaker in the Philippines, Rep. Luis Raymund Villafuerte, has proposed the country's first carbon tax on electricity consumption. Named the "Piso para sa Kalikasan" tax, the measure would charge P1 per kilogram of CO₂ per kilowatt-hour (kWh) of electricity used. Households using less than 60 kWh per month and consumers of renewable energy would be exempt. This initiative aligns with the Philippines' target to reduce its greenhouse gas emissions by 75% by 2030 under the Paris Agreement.
The New York State Environmental Agency (NYSERDA and DEC) completed draft regulations for the "cap and invest" program aimed at reducing pollution and funding climate initiatives just before Governor Kathy Hochul decided to delay the program. Initially expected to be released in mid-January and published by mid-February, these regulations are now put on hold.
Related Stock List(s): Carbon Allowance Stocks
Electric Vehicles
The U.S. Transportation Department, under newly appointed Secretary Sean Duffy, has moved to rescind the Biden administration's fuel economy standards, which aimed to increase Corporate Average Fuel Economy (CAFE) requirements to 50.4 mpg by 2031. The rollback is part of broader efforts to ease regulatory pressures on automakers and maintain internal combustion engine vehicle production. Additionally, the Environmental Protection Agency plans to reconsider emissions rules and revoke California’s waiver to ban gas-only vehicle sales by 2035.
The U.S. Transportation Department also plans to rescind a climate rule introduced during the Biden administration, which required states to set declining greenhouse gas emissions targets for vehicles on the national highway system.
Related Stock List(s): Electric Vehicle Stocks
Hydrogen
Spain is launching a €1.3 billion hydrogen hub funding scheme and allocating €400 million from its Recovery and Resilience Plan to support green hydrogen projects that missed out on EU funding. Spain is targeting a 74% share of green hydrogen in its industrial hydrogen demand by 2030 and has increased its electrolyser capacity goal to 12 GW.
Related Stock List(s): Hydrogen Stocks
Nuclear Energy
The UAE is expanding its nuclear energy ambitions globally, targeting investments in the United States, United Kingdom, and the Philippines. Emirates Nuclear Energy Company sees strong opportunities in the US, where AI-driven power demand is rising, especially with the $500 billion "Stargate" AI infrastructure initiative.
Related Stock List(s): Nuclear Energy & Uranium Stocks