Green Markets - June 27, 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
The EU's 100 Climate Neutral and Smart Cities Mission involves 112 cities committed to achieving net-zero greenhouse gas emissions by 2030, requiring a total investment of $695.83 billion. This initiative surpasses national targets, including those set by the EU and UK for 2050. Thirty-three cities, including Lyon, Seville, Malmo, Lisbon, and Florence, have already had their plans approved, with more expected by October.
British International Investment (BII), the UK’s development finance institution, and Symbiotics Investments have launched their second Green Basket Bond aimed at funding small-scale green projects across Africa, South Asia, and Southeast Asia. BII has committed $75 million to this initiative
The World Bank has approved a $700 million Development Policy Financing (DPF) package for Egypt aimed at promoting macroeconomic and fiscal resilience, as well as fostering a greener economic trajectory. Named the “Generating Resilience, Opportunities, And Welfare for a Thriving Egypt” DPF, the funding supports Egypt's structural reforms to stimulate private sector growth, improve economic competitiveness, and facilitate a transition to green initiatives, including scaling up renewable energy and enhancing efficiency in key sectors. The funding is part of the World Bank's three-year $6 billion program to support Egypt's development goals.
Switzerland has initiated a consultation process on proposed changes to align its corporate governance rules with the EU's Corporate Sustainability Reporting Directive (CSRD). These proposals aim to expand sustainability reporting requirements for Swiss companies, increasing the number subject to mandatory reporting, closer to EU standards. The CSRD, effective from 2024, mandates detailed sustainability disclosures for large public-interest entities, with broader coverage planned for smaller companies in subsequent years, aiming to enhance transparency on ESG impacts and risks.
Agritech/Agriculture
Novo Holdings has entered a strategic partnership with DLG Group by acquiring a 25% stake in Sejet Plant Breeding, a leader in agricultural innovation focused on improving crop yields sustainably. The collaboration aims to scale Sejet's business and advance its use of advanced breeding technologies.
Voluntary Carbon Markets (VCMs)
According to a report by Oliver Wyman, the City of London Corporation, and the UK Carbon Markets Forum, the global market for carbon dioxide (CO2) removal credits could potentially reach up to $100 billion annually between 2030 and 2035. This growth projection is substantial compared to the $2.7 billion in total sales of CO2 removals reported in 2023.
Hydrogen
The Federal Government, through Nigeria's Ministry of Petroleum Resources, has entered into an agreement with the Foundation for Sustainable Social Responsibility in Emerging Africa (FOSSREA) to develop new hydrogen projects. Signed in Abuja, the agreement aims to enhance Nigeria's energy sector by embracing hydrogen as a future fuel, not only domestically but also as part of the global energy landscape.
South Korea's Kukdong Oil & Chemicals and Deokyang Energen have initiated the construction of the nation's largest hydrogen gas production facility in Ulsan. Slated for completion by May 2026, the facility will boast a capacity of 92,000 normal cubic meters per hour (8,280 kg) and represents an investment of approximately 218.5 billion won ($157 million).
Eletrobras and Suzano have announced a partnership to develop sustainable solutions like renewable hydrogen production and potentially constructing a synthetic fuels plant. Discussions between the Brazilian power giant Eletrobras and pulpmaker Suzano have been ongoing since last year, and they plan to explore the feasibility of producing green fuels using biogenic CO2, a by-product of Suzano's pulp production process.
Renewco Power, a British renewable energy company, has entered into a strategic partnership with Texla Renovables in Spain to develop green hydrogen projects across Andalusia. This collaboration aims to decarbonize energy systems by replacing fossil fuels with renewable hydrogen.
Liquified Natural Gas (LNG)
Egypt has recently purchased 20 cargoes of liquefied natural gas (LNG), marking its largest procurement of the seaborne fuel. The tender initially called for 17 cargoes but was expanded by three due to heightened interest. Over 15 major LNG players participated in the bidding process.
The US Federal Energy Regulatory Commission (FERC) has granted approval to Venture’s CP2 LNG project in Louisiana, following a 2-1 decision during a June 21 meeting. The CP2 LNG facility will feature 18 liquefaction blocks with a capacity of approximately 1.1 million tonnes per annum (mtpa) each, along with four large LNG storage tanks. Despite FERC approval, CP2 LNG still requires non-Free Trade Agreement (FTA) export authorization from the US Department of Energy (DOE), which is currently paused under the Biden administration pending updates to the underlying analyses for such authorizations.
Nuclear Energy
The U.S. Department of Energy has issued a request for proposals (RFP) to purchase low-enriched uranium (LEU) from domestic sources. The initiative aims to stimulate the development of uranium enrichment capacity within the U.S., diversify the market, and ensure a stable supply of commercial nuclear fuel independent of Russian influence. The RFP is backed by $2.7 billion from the President's Investing in America agenda.
Renewable Energy
BP's new CEO, Murray Auchincloss, has initiated a hiring freeze and halted new offshore wind projects at the company, redirecting focus back to oil and gas amidst shareholder dissatisfaction with its energy transition strategy. This shift marks a departure from BP's previous trajectory under Bernard Looney, who aimed to accelerate the move away from fossil fuels. The company is also looking to invest in immediate-return oil and gas assets. Additionally, BP is considering investments in biofuels and other short-term low-carbon ventures to balance its portfolio.
Start-Up Investments
Solus Power, an innovator of portable electric vehicle charging solutions, has secured a $28 million funding deal from Petra Equity Partners. The company's flagship product, Kratos, is a compact, portable, military-grade power unit designed for easy transportation and discreet deployment under vehicles.
Sila, a battery startup, has raised $375 million in an all-equity Series G round to complete the construction of its Moses Lake, Washington factory by early next year. This facility will mass-produce Sila's Titan Silicon anode material for customers like Mercedes-Benz and Panasonic by the end of 2025. The funding round was led by existing investors, including Sutter Hill Ventures, Bessemer Venture Partners, Coatue, and Perry Creek Capital.
Li Industries, a recycling technology developer, has successfully closed its Series B funding round, raising a total of $42 million. New investors, including GM Ventures, DNX Ventures, and Tech Energy Ventures, committed an additional $6 million, bringing the company's total funding to over $50 million.
Sid’s Farm, a direct-to-customer dairy brand, raised $10 million in Series A funding from Omnivore and the family office of Ambuja Cement’s founder Narotam Sekhsaria.
e-Zinc, a developer of zinc-air battery technology, has raised an additional $31 million in Series A2 funding, following its initial $25 million Series A round. The funding, led by Evok Innovations and supported by Mitsubishi Heavy Industries, EDC, and Ultratech Capital Partners, aims to accelerate product development and complete a pilot manufacturing facility in Ontario.
Sirona Technologies, a direct air capture (DAC) startup founded by a former Tesla engineer, has successfully raised €6 million in a Seed round.
Vertus Energy, an Austrian startup specializing in waste-to-energy technology, has successfully raised €8.75 million in a seed funding round. Energy Capital Ventures led the investment, which included participation from Blackbird Ventures, Amadeus APEX Technology Fund, Aussie Angels, and existing investors.