Green Markets - July 10, 2024

Jul 11, 2024

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

Azerbaijan is launching a climate investment fund with an initial $500 million from its state oil company, Socar, ahead of hosting the UN COP29 summit. This move follows criticism and concerns over Azerbaijan's heavy reliance on oil and gas revenues, with discussions ongoing about allocating a significant portion of the fund to aid countries most affected by extreme weather events.

Nexa Resources, a mining firm, is in negotiations to sell its Pukaqaqa copper project. Valued at approximately $655 million, Pukaqaqa is situated in Peru's central highlands and holds significant copper-gold deposits estimated at 157 million tonnes of resources. Originally slated to begin operations in 2023, local opposition has delayed the project’s progression.

Liquid Wind and Uniper have signed a strategic partnership agreement to accelerate the development of eFuel facilities for producing fossil-free eMethanol. Under the agreement, they will explore opportunities for collaboration in facility development, power supply, and eMethanol offtake, complementing Liquid Wind's ongoing projects.
BP plans to invest $48.54 million (€44 million) to acquire a 15% stake in Lianyungang Jiaao New Energy, a producer of renewable diesel and sustainable aviation fuel (SAF). Jiaao Enprotech currently has a capacity of 100,000 metric tons per year of SAF, with China potentially introducing SAF mandates soon. The Civil Aviation Administration of China has drafted fuel standards to promote alternative fuels in aviation, aiming to increase SAF consumption.

Strathcona Resources is planning an investment of up to C$2 billion ($1.5 billion) in projects to capture carbon dioxide emissions from its oil sands operations, with backing from the Canadian public investment vehicle, Canada Growth Fund. The project aims to capture up to 2 million metric tons of CO2 annually by using the captured CO2 from steam production facilities and storing it underground. The project's success hinges on federal support through carbon capture investment tax credits and grants, with a final investment decision expected in mid-2025 and operations to commence by 2026.

BP has signed a deal with Simon Property Group to install and operate over 900 EV chargers at 75 sites across the United States, with the first locations opening in early 2026. This is despite a broader slowdown in EV demand due to high interest rates affecting consumer sentiment. BP Pulse, currently operating over 33,900 EV charge points globally, plans to increase this to 100,000 by 2030.

Poland has unveiled a draft hydrogen law that includes a $685 million program to support local electrolyzer manufacturing. The government's aim is to align regulations with EU-level legislation and to lobby for additional funds through the European Hydrogen Bank.
Enagas has agreed to sell its 30.2% stake in U.S. energy infrastructure company Tallgrass Energy to Blackstone for $1.1 billion to finance green hydrogen projects. Despite expecting a 360 million euro capital loss from the transaction, which will close by the end of the month, this move is part of Enagas' strategy to transition from natural gas to hydrogen infrastructure.
Cleanova has secured a major contract to supply filtration systems for a $4.5 billion blue hydrogen manufacturing facility in Louisiana, scheduled to commence operations in 2026. The facility will produce over 750 million standard cubic feet per day of blue hydrogen and blue ammonia.

Maersk is reportedly planning to announce an order for at least 12 dual-fuel LNG (methane) vessels in August, reflecting its need to hedge against the slower-than-expected production of green methanol and regulatory uncertainties surrounding shipping carbon prices.
Honeywell announced it will purchase Air Products' liquefied natural gas process technology and equipment business for $1.81 billion in cash. The acquisition will enhance Honeywell's LNG pretreatment business with technologies like heat exchangers and cryogenic equipment, amid increasing demand for LNG in key markets such as power and data centers. The deal is expected to close by year-end.

Iberdrola, Europe's leading electricity company, successfully issued a €750 million 10-year green bond with a 3.625% coupon amidst strong investor demand exceeding €4 billion from over 220 investors. The bond's oversubscription allowed Iberdrola to set a credit spread at 83 basis points over the 10-year mid-swap benchmark, the lowest for a green bond this year.
Eversource Energy has completed the sale of its 50% ownership share in the 924-MW Sunrise Wind project to Ørsted for $230 million. The transaction's proceeds are subject to adjustments, with half paid at closing and the remainder contingent on achieving construction milestones. The sale was contingent on Sunrise Wind securing a contract under New York State's energy certificate program, which was finalized in May 2024.
LS Cable & System, a South Korean company, has chosen Chesapeake, Virginia, for a new $680 million submarine power cable manufacturing facility. This facility, expected to start operations by the end of 2027, is one of the largest standalone investments of its kind in the US to support President Biden's ambitious offshore wind growth targets through 2050.

North Sky Capital has successfully raised $250 million for its impact secondary fund, Clean Growth VI (CG VI). This fund focuses on investments in energy transition, climate tech, and the circular economy. Investors in CG VI include pension plans, foundations, wealth management platforms, and family offices from diverse global locations.

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