July 22 - July 26, 2024

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In this Week’s Issue: $12 billion across 22 deals in Transition Finance ($6.2 billion), NbS ($695 million), Hard-to-Abate Industries ($4.9 billion), Carbon Removal ($66 million), and the Blue Economy ($127 million).

10 Essential Deals and Commitments:

Transition Finance

• The EPA awards $4.3 billion to 25 climate projects
• Masdar acquires a $887 million stake in Enel’s Spanish renewables portfolio
• NGP invests $500 million in transition commitments
• SAEL issues a $305 million green bond

Nature-based Solutions

• The UK launches a $192 million nature recovery initiative
• Uttar Pradesh distributes the first credits from its $24 million farmer carbon credit program

Hard-to-Abate Emissions

• Sustainable Aviation Fuel Financing Alliance raises $200 million for investment fund

Carbon Removal

• Australia awards $43 million to develop carbon capture technology projects
• Scotland makes further investments in Acorn carbon capture project

Blue Economy

• Huon Aquaculture prepares a $72 million expansion of its Tasmanian land-based salmon nursery

News Highlights

Policy and Regulation

• The IRS releases guidelines for IRA carbon sequestration tax credits
• Indonesia finalizes carbon capture and storage (CCS) regulations
• A UN task force draft document criticizes the voluntary carbon market

Climate & NbS Finance

• Brazil releases additional details on proposed global tropical forest preservation fund
• Washington Post finds some carbon credit projects were illegally claiming public land in Brazil
• Green bond sales topped $356 billion in the first half of 2024

Emerging Science

• Nature4Climate launches its fully developed naturebase platform
• UN FAO releases 2024 State of the World's Forests report
• A new study in Nature Climate Change examines cost effectiveness of reforestation techniques

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Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

USDA launches a $190 million grant opportunity for private forest landowner climate action [usda]

• The USDA has announced $190 million in grants funded by the IRA to support private forest landowners’ climate adaptation and mitigation efforts on working forestlands. The funds are split into $140 million to support state-endorsed cost-share programs for landowners, and $50 million to support programs that issue payments directly to landowners to adopt practices that increase carbon sequestration and storage in forests.

Deals

Interior department invests $450 million in Colorado River Basin restoration [denver gazette]

• The U.S Department of the Interior has announced $450 million in investments across the Upper Colorado River Basin to support ecosystem and habitat restoration. The funding will be available to public or tribal entities or their partners, with applications accepted through September 27, 2024. Projects are expected to provide environmental benefits, restore ecosystems and habitats, and address issues caused by drought within the river basin.

Micropep Technologies raises $29 million for crop protection biotechnology [environmental finance]

• Micropep Technologies, a crop pathogen and weed protection biotechnology business, has raised €27 million ($29 million) in a Series B round. The funding will help to strengthen its go-to-market strategy and complete regulatory studies for its first ‘bio fungicide molecule’.

Uttar Pradesh farmers receive first carbon credits under $24 million program [times of india]

• The state of Uttar Pradesh has provided its first payments to farmers under a carbon credit program operating in the state. 25,140 farmers are expected to receive payments worth more than 2 billion rupees by 2026, which will incentivize the planting and protection of on-farm trees.
• Fund Formation

UK nature recovery projects to receive $192 million in national lottery funding through new initiative [independent]

• £150 million ($192 million) has been set aside from the Uk's National Lottery Heritage Fund to build the Landscape Connections initiative, which will provide funding for local landowners, including both public and private organizations, to expand and restore protected areas throughout the country. The program expects to invest in around 20 projects over 10 years. Grants are expected to range between £250,000 to £10 million.

Transition Finance ≥ $100M

Commitments and deals

Deals

The EPA announces $4.3 billion to fund climate projects in 30 states [nbc washington]

• The EPA has announced it will award $4.3 billion in grants across 25 projects in 30 states, all focused on reducing greenhouse gas emissions across transportation, electric power, commercial and residential buildings, industry, agriculture and waste and materials management. $1.18 billion will be provided for zero-emissions transportation, including charging infrastructure and incentives to deploy zero-emissions vehicles; $372 million in funds to redevelop brownfields and landfills into renewable energy infrastructure; $1.06 billion for building energy efficiency; $636 million to reduce GHGs from industrial facilities; $931 million to restore and protect 250,000 acres of coastal and forest land, improve agriculture and reduce nitrous oxide emissions; and $121 million to capture methane from landfills and divert organic waste.

Masdar takes a $887 million stake in 2.5GW Spanish renewables portfolio [esg today]

• Masdar has announced an agreement with Enel to acquire a 49.99% stake in EGPE Solar for €817 million ($887 million). The deal represents 2.5GW of renewable energy in Spain over 48 operational solar plants, and foresees a 15 year power purchase agreement (PPA) where Enel's Endesa subsidiary will acquire 100% of the energy generated by the PV plants.

NGP invests $500 million in transition investments, including carbon capture [carbon herald]

• NGP has announced the formation of NGP Sustainable Real Assets, an energy transition fund, launched with $500 million in capital commitments from NGP and co-investors. The fund will target investments with a range between $50 and $150 million.

Green Bonds ≥ $100M

Commitments and deals

Completed Issuances

SAEL issues $305 million green bond [pv magazine]

• SAEL group has issued a $305 million green bond, its first on the international capital markets. The bonds were issued at a yield of 7.80% for a tenor of seven years and are expected to be rated BB+. Proceeds will be used to finance existing debt within the groups portfolio of renewable projects and fund capex for future projects.

Brookfield Renewable issues $288 million in green bonds [esg news]

• Brookfield Renewable has announced the issuance of CAD 400 million ($288 million) in medium term notes, split between CAD 100 million ($72.23 million) in Series 17 Notes due 2054 and CAD 300 million ($216 million) of Series 18 notes, due 2034.

Carbon Removal ≥ $1M

Commitments and deals

Commitments

Eaglesledge Energy plans $3 billion refinery with carbon capture investment [carbon herald]

• Eaglesledge Energy has announced plans to invest $3 billion in a new green energy-powered refinery and solar farm in Saskatchewan, Canada. The refinery will integrate CCS technology to capture 90% of the facility's emissions, and is expected to produce 30,000 barrels of fuel a day. The facility is expected to have an attached 125 MW solar farm to provide extra power, with a potential 400 MW solar farm to be constructed later.

Deals

Australia awards $43 million to 7 carbon capture projects [carbon herald]

• Australia has awarded a $43 million grant to 7 carbon capture projects focused on decarbonizing industrial processes. The investments include a $10 million grant to Calix Ltd, a company which produces methanol from carbon dioxide emitted in cement production, $9.5 million to MCi Carbon Pty Ltd, which produces building materials from cement production CO2, and $7.7 million to Airthena Technology Development Company Pty Ltd, a large scale DAC developer.

Cowboy Clean Fuels raises $13 million to close Series B round [esg today]

• Cowboy Clean Fuels, a renewable natural gas production and geologic carbon removal & sequestration company, has closed a Series B equity financing round focused on commercializing its technology. The company uses depleted Coal Bed Methane wells to develop natural gas from agriculture byproducts, which are converted into CO2 and stored in geologic coal formations.

CarbonBlue closes a $10 million seed round for water-based CO2 removal technology [carbon herald]

• Carbon Blue has closed a $10 million seed funding round, which will support the company's international growth. The round, which was supported by Frontier, provides funding to mature the company’s water-based carbon dioxide removal technology, which also has desalination applications.

Scotland makes multi-million investment in Acorn carbon capture project [carbon herald]

• Scotland will invest in the Acorn carbon capture project, joining Storegga, Shell UK, Harbour Energy and North Sea Midstream Partners. The funding is expected to help revive the stalled project, which is part of the UK's CCUS cluster program.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Deals

Germany plans $4.6 billion in hydrogen project investments [hydrogen central]

• The German federal government and a consortium of German state governments have dedicated €4.6 billion ($4.9 billion) for 23 green hydrogen projects throughout the country. The projects include large scale hydrogen production, storage, and transport development.

Methanex and Entropy launch $75 million carbon capture and methanol project [gasworld]

• Methanex has announced a partnership with carbon capture and storage specialist Entropy which will integrate carbon capture, utilization, storage and sequestration technology at Methanex's Medicine Hat site in Alberta, Canada. The partnership aims to eventually capture 400 tonnes of CO2 per day, and is expected to cost approximately CAD 100 million ($75 million).

H55 raises $74 million for electric aviation funding [esg today]

• H55 has raised CHF 65 million ($74 million) in a Series C funding round, with support from the Government of Quebec. The investment is expected to support the expansion of the company's North American operations and the completion of the company's EASA final certification for its propulsion battery pack technology, which it aims to have ready for integration into small aircraft by early 2025.

DOE announces $33 million for 9 concentrating solar-thermal investments in industrial sectors [DOE]

• The DOE will provide $33 million for 9 projects across 7 states utilizing concentrating solar-thermal (CST) systems technologies for solar fuel production and long-duration energy storage. The projects are focused on converting solar energies into clean fuels, and fall under the DOE's Long Duration Storage Shot, Industrial Heat Shot, Hydrogen Shot, and Clean Fuels & Products Shot initiatives. 3 projects, helmed by Exergy Labs, the National Renewable Energy Laboratory, and West Virginia University, use solar heat to generate decarbonized fuels. The 6 other projects focus on developing storage technologies to provide heat on demand.

Fund Formation

Sustainable Aviation Fuel Financing Alliance launches $200 million funding round [equities]

• 8 aircraft industry majors have invested $200 million in the new Sustainable Aviation Fuel Financing Alliance investment fund, which will invest to accelerate the availability of sustainable aviation fuel. Airbus was the anchor investor of the fund, with support from Air France-KLM Group, Associated Energy Group, LLC, BNP Paribas, Burnham Sterling, Mitsubishi HC Capital Inc. and Qantas Airways Limited. The fund has already invested in Crysalis Biosciences, with plans to continue making strategic investments in technologically mature fuel projects.

Blue Economy ≥ $1M

Commitments and deals

Deals

Huon Aquaculture to invest $71.5 million in on-land salmon farming infrastructure [feed strategy]

• Huon Aquaculture is preparing a AUD 110 million ($71.5 million) expansion investment in its Tasmanian freshwater Atlantic salmon nursery. The investment is expected to increase the amount of water recycled in the nursery system to 99%, and expand the land-based aquaculture system’s footprint.

Oceano Fresco secures $18 million for sustainable bivalve production [tech.eu]

• Oceano Fresco, a sustainable seafood company focused on bivalves, has raised a €17 million ($18.4 million) funding round. The funding round was led by Indico Capital Partners, with participation from BlueCrow, Aqua-Spark, and FdCR. The funding is expected to support Oceano Fresco's market expansion of its open-sea farm, where bivalves are cultivated without antibiotics or artificial feed.

BlueGreen Water Technologies closes Series B2 round in double-digit millions [carbon herald]

• BlueGreen Water Technologies, a water-based carbon removal company, has successfully closed its Series B2 funding round for an undisclosed amount in the double-digit millions. The funding is expected to help expand the company's toxic algal bloom remediation efforts and expand its research into marine-based CDR.

Research and Knowledge Sharing

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Policy and Regulations

Brazil joins Global Climate Finance Framework [pr newswire]

• On July 25,2024, Brazil announced that it endorsed the UAE Declaration of Leaders on a Global Climate Finance Framework, joining 15 other countries. The agreement was introduced at COP 28 and lays out 10 defining principles for structuring climate finance, including MDB and IFI reform, and the replenishment of the Green Climate Fund.

IRS releases IRA carbon sequestration credits guidelines [carbon herald]

• The IRS has released finalized instructions for carbon sequestration tax credits to be claimed by taxpaying entities under the 45Q tax credit. The credit was established in the 2022 Inflation Reduction Act. The new guidelines outline what details need to be included in lifecycle analysis reports that accompany tax credit claims. The credit will provide $85 per ton of CO2 captured and $180 per ton of CO2 removed, and is expected to support emission reductions for existing fossil fuels infrastructure, among other initiatives.

Indonesia finalizes CCS regulation [carbon herald]

• Indonesia has released a finalized carbon capture and storage (CCS) regulation, a crucial part of the country's pledge to cut its greenhouse gas emissions by 31.8% independently, or by 43.2% with international assistance, by 2030. The regulation is awaiting final approval by outgoing president Joko Widodo.

EPA emissions rule clears court hurdle [carbon herald]

• The U.S EPA's natural gas and coal fired plant emissions regulations have cleared a challenge in the U.S court of appeals, allowing the regulation to proceed while challenges to its implementation are adjudicated by the courts. The regulation will require power plans to slash their emissions by 90%, with compliance deadlines in the early 2030s.

Jamaica stock exchange releases green, blue and sustainability bond guidelines [esg news]

• Jamaica's stock exchange has launched new guidelines for green, blue, and sustainability bonds, with the goal of improving the country's ability to attract sustainable investments. The formula follows the International Capital Market Association's principles, including segmentation through thematic groups, designating assets related to funding purpose, dedicated proceeds for the stated project and publishing regular financial reports. The taxonomy is expected to help Jamaica invest the $6 billion in climate mitigation and adaptation it is estimated to need by 2050.

USAID and SEAFDEC launch 5 year fisheries management partnership [usaid]

• The Southeast Asian Fisheries Development Center (SEAFDEC) and the United States Agency for International Development (USAID) have announced a 5-year partnership enhancing the management of fisheries and aquaculture resources. The partnership focuses on promoting policies, programs and plans for sustainable management of fisheries, providing commercial and small-scale fishers access to financial and human resources, and enhancing the operational and technical capacity of national fisheries agencies.

Turkey plans 500 million tree annual reforestation project [daily sabah]

• Turkey has announced plans to plant 500 million seeds and saplings annually to restore damaged ecosystems. The plan includes a dedicated core of 25,000 personnel who will support ongoing restoration.

UN task force criticizes use of voluntary carbon credits [carbon herald]

• The Financial Times reports that a draft task force document commissioned by the UN secretary-general will argue that carbon credits purchased by polluters outside of regulatory schemes should not be considered emissions reductions. The task force’s recommendation is not yet final, and it is unclear what effect it would have on a potential carbon market regulated under article 6.4 of the Paris Agreement.

Guyana launches Amazonian biodiversity finance coalition [environmental finance]

• Guyana has announced that it plans to build a coalition of Amazonian countries to drive finance to biodiversity protection in the Amazon basin. The potential countries are not yet disclosed, but the move was supported by the Inter-American Development Bank.

Finance Research and Updates

Brazil unveils more details on forest protection fund [capital reset]

• Brazil has provided updates on a proposed multibillion-dollar global tropical forest preservation fund. The fund aims to gather approximately $125 billion to reward countries for the preservation of tropical forest biomes. The new 34-page proposal includes plans to source 20% of the fund’scapital by borrowing funds from rich countries and MDBs at sovereign rates, and then investing the proceeds in high yield portfolios, using the spread between the two investments to service debt and provide payments to countries participating in the scheme. The remaining capital is expected to be raised by issuing high-rated debt securities. Payment to participating countries would be contingent upon proof of no loss of forested areas.

remove announces carbon dioxide removal accelerator cohort 6 [carbon herald]

• remove, a carbon removal startup accelerator, has announced the second stage of its Cohort 6, selecting 8 companies to move to the new phase. These companies are focused on different segments of the carbon removal industry, and include Calcin8 Technologies and HyveGeo from the UK, Yama from the U.S., RECOAL AG from Switzerland, PyroCCS – Biochar CDR Solutions and ecoLocked from Germany, Limenet from Italy, and Exocarbon.

Green Bond sales in 1st half of 2024 tops $356 billion [bloomberg]

• Bloomberg estimates that green bond sales in the first half of 2024 were more than $356 billion, the busiest half year since the inception of the green bond market. Sales were $191 billion in the first quarter and $165 billion in the second. The largest single sale was by the Italian government, for €9 billion ($9.74 billion). Social bond sales also increased to $52 billion in Q1 and $30 billion in Q2.

ALTÉRRA-backed fund made $300 million fossil fuel pipeline commitment [climate homenews]

• ALTÉRRA, the UAE-helmed private investment vehicle focused on climate solutions, was found by Climate Home to have invested $300 million in BlackRock's "Global Infrastructure Fund IV," which had recently acquired half of the 475 km-long Portland Natural Gas Transmission System. It is unclear what ALTÉRRA's position on the investment was, but the move drew intense criticism from climate campaigners, who accused the fund of greenwashing.

Report finds multi-billion pound gap in nature-friendly farming investments must be overcome to meet climate goals [wildlife trusts]

• A new report commissioned by the UK's RPSB, National Trust, and The Wildlife Trusts, finds a gap of more than £5 billion ($6.42 billion) between current climate and nature-smart farming funding and estimated needs. The report estimates that the UK requires £5.9 billion annually to meet binding nature and climate targets in farming, compared to an annual agricultural budget of £3.5 billion, of which only 20-25% is dedicated to agri-environment schemes.

Washington Post finds potential exploitation of carbon credits on protected Amazon land [washington post]

• A six-month Washington Post investigation has found that private ventures have repeatedly claimed carbon credits from publically protected land, despite having no title to the land or agreement to utilize it. The private ventures were found to have claimed over 78,000 square miles of public land and sold credits to major international companies including Netflix, Air France, Delta Air Lines, Salesforce, PricewaterhouseCoopers, Airbnb, Takeda Pharmaceutical Co., Boston Consulting Group, Spotify, and Boeing. The study found that 29 projects were certified by Verra or Cercabono despite being sited on public land.

Emerging Science

Vietnams's pilot low-emissions rice project shows results [irri]

• The Ministry of Agriculture and Rural Development (MARD) of Vietnam and the International Rice Research Institute (IRRI) have provided results from pilot projects under the Sustainable Development of One Million Hectares of High Quality and Low-Emission Rice Associated with Green Growth in the Mekong River Delta By 2030 Program. The pilots found an increase in yield of .5-.7 tons/hectare compared to non participating farms. The model also reduced GHG emissions by at least 2 tons CO2 eq/ha.

UN FAO releases new guidelines on sustainable aquaculture [fao] [seafood source]

• The UN Food and Agriculture Organization has endorsed new guidelines for aquaculture, with the goal of establishing worldwide best practices for the industry. The new Guidelines for Sustainable Aquaculture (GSA) was designed with the aid of NOAA. The guidelines follow increasing growth in aquaculture production, which outnumbered wild caught fish in 2022. The document covers guidelines for promoting sustainable aquaculture and how to implement and monitor guidelines.

UN FAOreleasesState of the World’s Forests 2024 report [relief web]

• The UN FAO has released the 2024 edition of the State of the World's Forests providing an overview of forest health, global wood production, insect damage and dependence of communities worldwide on forest utilization. The report found wildfire intensity and frequency increasing, releasing an estimated 6,687 megatonnes of carbon dioxide globally in 2023.

New article in Nature Scientific Reports examines green finance’s effects on the low-carbon transition in Chinese Cities [nature]

• A new paper in Nature Scientific Reports analyzes the effects of green finance on low-carbon development in 277 Chinese cities, surveyed from 2010 to2020. The results found higher carbon intensity in the east of China than the west of China, which decreased significantly with the use of green finance. The study also found that green finance techniques mainly promoted a low-carbon transition by adjusting the industrial structure of the cities, as opposed to stimulating technological innovation.

Mixed reforestation methods offer cost savings for mitigation, research briefing finds [conservation international] [nature]

• A first-of-its-kind study in Nature Climate Change examines different methods of reforestation to examine expected cost-per-ton of carbon for reforestation projects. The study found that for 46% of forests, natural regeneration would allow for a more cost effective restoration of degraded forest ecosystems, and that using a mix of planted reforestation and natural restoration could remove 40% more carbon than utilizing the two techniques separately. The study estimated that there was 10 times more potential for low-cost reforestation to sequester carbon than previously estimated.

Severe damage found in 80% of surveyed mangroves along Great Barrier Reef shoreline [jcu]

• A survey by James Cook University has found severe damage in 80% of mangroves along the great barrier reef. The Great Barrier Reef Mangrove and Saltmarsh Condition Survey which used geo-referenced photographs from helicopter surveys, found extensive damage from rising sea levels and tropical cyclones, and suggested that 17,255 hectares of the damaged mangroves were ripe for restoration.

Nature4Climate launches full version of naturebase platform [nature4climate]

• Capital for Climate’s partners Nature4Climate have launched a full version of their naturebase data platform, which provides snapshots on the potential for the implementation of different natural climate solutions (NCS) in different jurisdictions worldwide. The platform allows users to assess emission reduction potential by NCS category on a countrywide, subnational, or even square kilometer basis. The tool will be regularly updated to include new developments in natural climate solution science.

Food Security article finds forests are effective for reducing food insecurity when properly managed [springer]

• A new article in Food Security: "Food security effects of forest sector participation in rural Liberia" examines the effects of forest sector participation on food security in rural areas in Liberia. The results suggested that forest sector participation reduced the number of months households had insufficient food by 84%.

Research finds tree bark absorbs methane from the atmosphere [bloomberg]

• A new study in Nature suggests that trees can absorb 10% more greenhouse gasses than previously thought, primarily by absorbing methane, a greenhouse gas more potent than CO2. The study was the first to quantify the ability of microbes in tree bark to eat methane, finding that trees can remove between 24.6 million tons to 29.9 million tons of methane annually, on par with soil. The study was focused on upland trees, which make up most of the world's forests.

Study finds world’s forests remain a carbon sink amidst deforestation [phys] [nature]

• A new study in Nature examines the current state of the world’s forests’ ability to uptake and retain carbon. Despite ongoing issues caused by deforestation and climate change, the study estimated that forests take up an estimated 3.5 +- .4 billion metric tons of carbon per year. This had declined however, with boreal forests‘ capacity falling by 36%, tropical forests’ by 31%, and temperate forests’ by 30%.

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