Green Markets - July 17, 2024
Green Markets - July 17, 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
United States Congresswoman Julia Brownley (D-CA) recently introduced the Methane Border Adjustment Mechanism Act, proposing a tax on methane emissions from foreign oil and natural gas producers exporting to the U.S. This bill aims to extend the domestic methane fee from the Inflation Reduction Act to international producers, ensuring U.S. producers are not disadvantaged and aligning with international trade standards.
The European Union has enacted its first-ever legislation to reduce methane emissions, effective in 2025. The regulation targets emissions from the oil, gas, coal, and biomethane sectors within Europe and from its supply chains. Member states must appoint national authorities to oversee compliance, and advanced monitoring and reporting technologies are mandated. The European Commission will establish methodologies for importers to report methane emissions by 2027.
Spanish Prime Minister Pedro Sanchez has announced a new $2.5 billion plan aimed at accelerating Spain's transition to clean energy. The plan includes subsidies for green energy industries and the production of hydrogen from renewable sources.
The European Commission has announced a €7 billion investment in sustainable transport infrastructure through the Connecting Europe Facility (CEF). About 83% of these funds, approximately €5.81 billion, will focus on achieving EU climate objectives. Key investments include 80% allocated to rail projects such as Rail Baltica and Lyon-Turin, aimed at improving cross-border connectivity and sustainability. The funding will also enhance 20 maritime ports across Europe for shore-side electricity and renewable energy transport, and support inland waterway projects and road transport advancements.
Carbon Capture
The Indian government will soon introduce a policy framework for carbon capture, utilization, and storage (CCUS) initiatives, designating the power ministry as the nodal agency. The Prime Minister’s Science, Technology & Innovation Advisory Council (PM-STIAC) discussed the importance of CCUS for decarbonizing hard-to-abate sectors and the creation of a national portal to unify stakeholders.
Energy Efficiency
Akaysha Energy, owned by BlackRock, secured $650 million in debt financing for the 415 MW Orana battery energy storage system (BESS) in New South Wales. The financing includes a 12-year virtual toll offtake agreement with EnergyAustralia for 200 MW of capacity, allowing them to manage energy pricing and demand without owning the battery. The Orana BESS, utilizing Tesla Megapack technology, will commence commercial operations in 2026 and is part of a larger $3 billion investment by Akaysha in Australian energy storage projects.
Hydrogen
The World Bank has extended a second $1.5 billion loan to India within a year, reflecting confidence in India's aggressive policies aimed at promoting green hydrogen and low-carbon energy. The Indian government is providing subsidies for electrolyzer manufacturing and green hydrogen production.
3M recently invested in Ohmium International, a green hydrogen technology company specializing in proton exchange membrane (PEM) electrolyzer systems. Ohmium recently raised $250 million to enhance its manufacturing capacity and international presence.
Liquified Natural Gas (LNG)
Cheniere Energy's newly operational ADCC pipeline, jointly owned with Whistler Pipeline, connects the Agua Dulce Header to its Corpus Christi LNG facility in Texas. After recently starting commercial operations on July 1st, 2024, this 40-mile pipeline has the capacity to transport up to 1.7 billion cubic feet per day (Bcf/d) of LNG, expandable to 2.5 Bcf/d.
According to the Petroleum Planning and Analysis Cell (PPAC), India's LNG imports in June 2024 reached approximately 2.64 billion cubic meters, an 11.4% increase compared to June 2023.
Nuclear Energy
South Korea's Korea Hydro & Nuclear Power (KHNP) has won a bid to build at least two new nuclear reactors in the Czech Republic, beating out France's EDF. The Czech government, aiming for energy independence and reduced fossil fuel reliance, plans to sign the contract by March 2025. The first reactor is slated to start trials by 2036, and the second soon after.
The United Arab Emirates (UAE) is contemplating the construction of a second nuclear power plant to meet rising electricity demand. While no final decision has been made, any new plant would likely feature two or four reactors.
Renewable Energy
Pertamina, Indonesia's state-owned energy company, has signed a Memorandum of Understanding (MoU) with Coal Power Generation Company Bangladesh Limited (CPGCBL) to develop a 500 MW grid-connected solar PV project in Bangladesh and other areas. The MoU, contingent on a feasibility study, also includes plans for supporting infrastructure and potential future collaborations.
Generac Power Systems has secured up to $200 million from the U.S. Department of Energy (DOE) as part of Puerto Rico's Energy Resilience Fund. This grant, spanning five years, supports the Solar Access Program under Programa Acceso Solar, aiming to install solar and battery storage systems in disadvantaged Puerto Rican households starting August 2024.
Investment Funds
HSBC has established a new unit, HSBC Infrastructure Finance (HIF), to capitalize on deals in infrastructure and project finance related to the global shift towards a lower-carbon economy. HIF will also oversee HSBC's Pentagreen Capital joint venture, targeting sustainable infrastructure projects in Asia.
Shein announced a $270.5 million investment over the next five years in the EU and UK. €200 million will be allocated to the Circularity Fund to support startups and businesses innovating in textile recycling and related fields.