Your Newsletter at a Glance

Commentary by C4C

In this issue, showing continued resilience, climate tech investments reached $16.6bn overall in Q3 of 2023. However, foodtech investment in Asia Pacific fell more than 50% in 2022. Toyota announces $8bn in battery investment in North Carolina. Dominion Energy is approved for a 2600 Megawatt wind farm off the Virginia coast. The Biden administration backs climate smart agriculture. Mubadala issues a $750M green bond, and Engie Brasil buys $653M worth of Brazilian solar parks from Atlas.

Policy and regulatory movements:

• The Biden Administration announces major climate smart agriculture initiatives across the country.
• The USDA releases its 1st report on forestry and agricultural carbon markets mandated by the Growing Climate Solutions Act of 2022.
• The governments of Ontario and the Canadian federal government announce a plan to plant 31 million trees.
• Fiji releases its first sovereign blue bond.

Climate finance trends:

• China's coal boom finally starts to show plans of overstretching, as planned plants are shelved.
• Trading in Compliance Carbon Markets expected to pass $800 billion this year, despite some dips in volume.
• A University of Oxford study finds that Brazil's climate change commitments will be impossible to meet without massive investment in Nature-based Solutions.

Additional research pieces to consider

• An upcoming paper by James Hansen and others argues that climate change may cascade further than expected.
• Stable and controlled herbivore populations are found to be vital to forest growth and health in a new multi-university study.
• A new study in Ecology explores the effects that the time of planting has on restoration projects.

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Research and Knowledge Sharing

Grow your climate finance expertise

Climate

Biden administration approves biggest offshore wind farm yet, in Virginia [USDOI]

• The Department of the Interior announced the approval of the construction and operation of the Coastal Virginia Offshore Wind Commercial (CVOW-C) project. At 112,799 acres and located approximately 23.5 nautical miles east of Virginia Beach, Virginia, the approved version of the project will have an estimated capacity of about 2,600 megawatts of clean energy, capable of powering over 900,000 homes. Dominion Energy won the BOEM lease sale for the project on 4 September 2023.

Global Landscape of Climate Finance 2023 [CPI]

• CPI released their newest report on the analysis of global climate-related primary investment, The Global Landscape of Climate Finance. Here are some of the key findings: average annual flows in 2021/2022 reached almost USD 1.3 trillion, doubling compared to 2019/2020 levels (this is the first time investments surpassed USD 1 trillion, six years after the Paris Agreement was adopted); even though this represents an all-time high for climate finance, it is just 1% of global GDP; most tracked climate finance continues to flow towards activities for mitigation, in particular to renewable energy and low-carbon transport, sectors which are often perceived as less risky by investors; and less than 3% of the global total of climate finance went to the least developed countries, despite being some of the most vulnerable countries and regions to the impacts of climate change.

China’s coal boom includes 775 gw of shelved, canceled, or closed plants [Clean Technia]

• China’s coal demand growth is almost over. Its coal burning remains very high, but it’s not accelerating as the narrative suggests, and it will be declining sooner than expected. Shelved and canceled coal generation plants that never reached construction are 652 GW, while the likelihood that 255 GW of coal generation in the pre-construction pipeline doesn’t reach construction or operation is high.

How solid-state batteries could transform transport [Financial Times]

• Toyota appears close to a manufacturing breakthrough that could accelerate the transition to electric vehicles. Learn more about how the technology can transform the current state of battery development for transportation.

Global carbon markets get bigger, even as trading dips [BloombergNEF]

• The total value of major compliance carbon markets is expected to top $800 billion this year, despite trading volumes being on track to fall amid the lingering fallout from Russia’s invasion of Ukraine. The 5% growth in value reflects the rally in allowance prices from reforms looking to leverage carbon markets to achieve climate targets, tempered by concerns related to energy affordability and security.

Climate tech investments rise to $16.6 billion in third quarter [Bloomberg]

• Climate tech companies just had their best quarter for fundraising in almost two years, drawing $16.6 billion in investment during Q3 of 2023 for a wide range of decarbonization and low-carbon startups.

American carbon removal can be a powerful edge over China in the critical minerals race [MCJ Collective]

• While carbon capture is a developing field, it’s been demonstrated that atmospheric carbon dioxide can be transformed into the same kinds of graphite that are needed for EV battery manufacturing. When it comes to CO2 removal, this is a triple-win: active removal of past carbon emissions; establishing a business model that substantially outpaces others in CDR; and securing America’s hold on cutting-edge technology in an increasingly volatile world.

Researchers led by Jim Hansen argue that reducing greenhouse gas emissions is not enough to combat climate change [Phys.org]

• An analysis of climate data in Oxford Open Climate Change, led by researcher James Hansen, states that the strategies humanity must pursue to reduce climate change will have to include more than reducing greenhouse gases (e.g. carbon removal). This new paper reevaluates climate sensitivity based on improved paleoclimate data, finding that climate is more sensitive than usually assumed. Their best estimate for doubled CO2 is global warming of 4.8°C, significantly larger than the 3°C best estimate of the United Nations Intergovernmental Panel on Climate Change. Note: The article has been accepted for publication and will be available via the link above once published.

CalPERS to double climate investments, consider asset sales [Reuters]

• California's top public pension system said it will more than double its climate-focused investments to $100 billion by 2030, and consider selling stocks in companies with poor plans for the energy transition.

Nature-based Solutions

New research finds that nature-based solutions are essential for Brazil to meet its 2050 net zero pledge [Phys.Org]

• Researchers out of the University of Oxford report that without the implementation of nature-based solutions, Brazil will jeopardize its Nationally Determined Contribution (NDC) pledges, including achieving net zero GHG emissions by mid-century. The study also concluded that halting deforestation is the single most important mitigation measure Brazil can take towards net zero emissions by 2050 while preventing biodiversity loss. Read the original open-access study here.  We agree, which is why Capital for Climate launched the Brazil NbS Investment Collaborative.

APAC AgriFood Report: funding hits a low, but farm tech & novel foods are on the rise [Green Queen]

• Agrifood tech startups in Asia-Pacific saw an investment of $6.5B in 2022, a 58% fall from the year before – but agtech funding for farmers and primary novel food production increased by 24% year-on-year. Read the original report here.

Mother Nature knows best when it comes to climate solutions, social media users say [Phys.org]

• New research published in Global Environmental Change finds that more than a million social media posts suggest people feel more positively about nature's ability to solve climate change, rather than human technology. More than 1.5M posts were assessed using deep learning models, with results finding that posts about nature-based efforts to protect carbon-storing ecosystems like rainforests, kelp forests under the sea, and peat bogs, offered more positive expressions, such as "joy". According to researchers, social media analysis is consistent with survey results and qualitative research. This publication was developed via a collaboration between institutions across the U.S., the UK, and Europe - the original study can be accessed here.

USDA releases assessment on agriculture and forestry in carbon markets [USDA]

• The USDA released a new comprehensive report looking at current market activity, barriers to participation, and opportunities to improve access to carbon markets for farmers and forest landowners. The report is the first of USDA’s deliverables under the Growing Climate Solutions Act (GCSA). Among other barriers, farmers face limited returns on investment due to high transaction costs in carbon markets, including the costs of greenhouse gas quantification, verification, and reporting. However, a clear assessment of these barriers gives federal agencies, scientists, farmers, and other partners valuable insight into what kinds of solutions can facilitate increased and more beneficial participation by farmers. Read the original report here.

Launch of Fiji’s first-ever Sovereign Blue Bond [UNDP]

• The Government of Fiji with support from the Government of the United Kingdom and the United Nations Development Programme (UNDP) Pacific Office in Fiji has announced the issuance of Fiji's historic first-ever Blue Bond, referred to as the Fiji Sovereign Blue Bond (FSBB). The FSBB will be available on the capital market for potential investors from 2 through 7 November 2023 and will be issued to successful bidders from 8 and 9 November, with thanks to support from the Reserve Bank of Fiji. The Government is inviting tenders for the issuance of three and 15-year Fiji Sovereign Blue Bonds, with the three-year coupon rate fixed at 1 percent per annum, and 4.2 percent over 15 years with a FJD20 million ceiling established.

New study reveals overlooked driver of biodiversity across landscapes: Conditions during plant establishment [Phys.org]

• A new study published in Ecology, researchers from Holden Forests & Gardens, the University of California, Davis, and Southern Oregon University reveal an under-appreciated driver of diversity across landscapes: the conditions during plant establishment, or year effects. Why this matters for NbS: by understanding the importance of year effects on plant communities, land managers can better design and implement restoration projects to promote diversity and long-term resilience.

Trophic cascades help restore vegetation - Herbivores and their predators have a major impact on restoration outcomes [Science]

• Herbivores engineer ecosystems through top-down control of vegetation, as well as by regulation of plant diversity and dispersal, fire severity, soil nutrient cycles, and carbon stocks, among other processes. For years, the impact and potential role of reintroducing, facilitating, or preventing herbivores from accessing areas where restoration of lost or degraded vegetation is encouraged has been debated. A new research paper representing a collaboration of researchers from institutions such as Fudan University, University of Maryland, and Duke University, presents evidence that herbivores have a strong impact on vegetation restoration. The research provides insights that could accelerate restoration efforts.

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Climate Finance ≥ $100M

Commitments

VinFast enters into standby equity subscription agreement of up to $1bn with Yorkville advisors [Clean Technia]

• Vietnamese electric vehicle maker VinFast and global investment fund manager Yorkville Advisors have entered into a standby equity subscription agreement of up to $1 billion. Under the terms of the agreement, VinFast has the option, but not the obligation, to require Yorkville to subscribe for up to $1 billion worth of ordinary shares in VinFast at any time during the 36-month term of the agreement.

US President Biden announces $145M to expand access to renewable energy and lower energy costs for rural Americans [White House]

• USDA announced $145 million in funding for 700 loan and grant awards through the Rural Energy for America Program (REAP) to help agricultural producers and rural small business owners make energy efficiency improvements and renewable energy investments to lower energy costs, generate new income, and strengthen the resiliency of their operations.

Deals

Mubadala gets solid investor response for first $750M green bond [Trade Arabia]

• Abu Dhabi-based investor Mubadala has issued its first-ever Green Bond for $750 million with a tenor of 10.5 years, at a yield of 6.03% and coupon at 5.875%. The issuance saw strong demand from the market. The order books peaked at more than $6 billion with robust demand from local, European, Asian, and American accounts.

Engie buys solar parks from Atlas for BRL$3.2bn ($653M) [Reset]

• Engie Brasil paid BRL$3.2 billion for Atlas' solar parks in the country, including the cost of debt, in one of the largest operations of the year in the sector. In total, the parks have an installed capacity of 545 MW, with part of the energy already sold under long-term agreements. The amount disbursed for the purchase was R$2.27 billion plus Atlas' net debt, around R$971 million, which will be consolidated.

Altius Renewable Royalties announces closing of $247M credit facility [Businesswire]

• Altius Renewable Royalties Corporation announces that certain subsidiaries of ARR’s 50% owned Great Bay Renewables joint venture have entered into senior secured credit financing agreements in the aggregate amount of $247 million. The financing includes a $123.5 million initial term facility, a $100 million delayed draw term facility, and a $23 million letter of credit facility, with the both term facilities qualifying for green loan eligibility.

Efficient motor maker Infinitum raises $185M in round led by climate-focused fund [Reuters]

• Climate technology firm Infinitum, which develops high-efficiency industrial motors, said it had raised $185 million in a funding round led by investor Just Climate. Infinitum etches copper conductors into a circuit board, making their motors smaller, lighter, and quieter, while also reducing energy consumption by 10% to 65%.

IWEL raises Rs 800 crore ($96.2M) through sale of equity shares of Inox Wind [Business Standard]

• Inox Wind Energy Ltd (IWEL) has raised Rs 800 crore through the sale of equity shares of Inox Wind via block deals on the Bombay Stock Exchange (BSE). The funds raised will be infused into IWL and utilized for the repayment of IWL's external debt. The transaction witnessed strong participation across long-only domestic and foreign institutional investors.

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Nature-based Solutions ≥ $1M

Commitments

US President Biden announces $1.7bn for climate-smart agriculture from Investing in America Act [White House]

• The USDA announced nearly $1.7 billion in funding to support the adoption of climate-smart agriculture practices, which have direct climate mitigation benefits, advance a host of other environmental co-benefits, and offer farmers, ranchers and foresters new revenue streams.

Government of Canada and Forests Ontario partner to plant 31 million trees and advance the 2 Billion Trees Program ($90.0M) [PR Newswire]

• The Government of Canada committed to planting two billion trees across the country, announcing a joint commitment with Forests Ontario to plant 31 million trees across the country through the 2 Billion Trees program. The project is expected to raise $123M, with fifty percent contributed by the Government of Canada. The remaining amount will be raised by Forests Ontario who will work with corporate supporters, partners, and donors across Canada.

Deals

Gresham House achieves £300M ($371.3M) target for forestry fund [Funds Europe]

• Alternative asset manager Gresham House has achieved its target of £300 million in total commitments for its Forest Growth & Sustainability LP following a final close. The fund attracted interest from institutional investors, family offices, and private clients, highlighting the increasing recognition of forestry as a sustainable natural capital investment. The fund invests in new planting land for woodland creation and established sustainable commercial forestry across the UK. It aims to generate returns from timber sales, carbon sequestration and sale of carbon credits and capital growth from land and trees.

VisVires New Protein rebrands as Clay Capital, closes $145M second fund [AgFunder News]

• Singapore-based agrifood investor VisVires New Protein (VVNP) has rebranded as Clay Capital and announced the close of its second fund. The $145 million Fund II will back startups in Europe, Israel, and Asia “applying technology to remedy fundamental problems in the food system.”

Triplebar’s latest $20M financing will expand its product portfolio across food and biopharmaceuticals [Vegconomist]

• Triplebar announced $20M in new financing to expand the biotechnology company’s product portfolio in food and biopharmaceuticals. Synthesis Capital led the round, with participation from Essential Capital, Stray Dog Capital, iSelect Fund, and existing major investor The Production Board. Triplebar’s “microprocessor for biology” exploits evolution to develop food proteins, reducing the cost and footprint of food systems.

Kuva Space raises €16.6M ($17.6M) Series A to scale hyperspectral imagery ambitions [Tech Crunch]

• Kuva Space, a hyperspectral imagery startup founded in Finland, has closed a €16.6 million ($17.6 million) Series A funding round as it looks to deploy up to 100 satellites by the end of the decade. The round was led by existing investors Voima Ventures and Nordic Foodtech VC, with participation from Singapore fund Earth VC. The round also included capital from Finnish private investors via a Finland growth fund called Springvest and non-equity funding from Business Finland.

Sustainable packaging startup Fibmold secures $10M funding from Omnivore, Accel [Inc 42]

• Sustainable packaging startup Fibmold has secured $10 Mn funding in a round led by Omnivore and Accel. The startup asserts that its packaging products are crafted from natural fibers, and are fully recyclable and naturally biodegradable. Fibmold contends that by adopting its eco-friendly packaging solutions, companies can transition away from single-use plastics.

Aquatech startup raises $9.5M to expand data-driven aquaculture technology [Intrafish]

• Italy-based tech company WSense has completed a €9 million ($9.5 million) fundraising event led by investment firm SWEN Capital's ocean fund, Blue Ocean. The blue-tech company develops wireless underwater monitoring and communication systems. The technology makes it possible to collect underwater data at a large scale, and open up possibilities including sustainable data-driven aquaculture.

Verqor raises $7.5M to digitalize Mexico’s agricultural sector [LatamList]

• Verqor, a fintech startup digitalizing Mexico’s agricultural sector, has raised $7.5M, led by Yara Growth Ventures. Accion Venture Lab, SP Ventures, Glocal Ventures, and Amplifica Capital also participated in the round. Verqor provides cashless credits to farmers to purchase essential supplies, like fertilizers, agrochemicals, and organic products. At the end of the crop cycle, farmers pay back the credit with their produce sales.

Danish biotech Bioomix raises €6.3M ($6.8M) to make agriculture more sustainable with microbial solutions [EU Startups]

• Odense-based bioindustrial startup Bioomix announced it has raised €6.3 million in fresh funding. The round was led by West Hill Capital and featured participation from new investors, alongside continued support from existing backers, including PreSeed Ventures (PSV), Planetary Impact Ventures, HBL Invest, and David Hollidge. Bioomix develops microbial solutions to problems in the agricultural, food, health and environmental sectors by combining cutting edge techniques, such as bioinformatics, sequencing, 3D printing, image analysis, biomaterials, satellite and drone technology, to discover beneficial microorganisms, and turn them into products.

Mexican agtech Solena AG raises $6M in a Series A [Conxto]

• The Yield Lab Latam, alongside other entities, invested $6M in Solena Ag. Solena aims to revolutionize the agricultural industry by expanding understanding of the soil microbiome to optimize inputs for agricultural productivity and sustainability.

Algenesis secures $5M to produce at scale biodegradable plastic made from algae [Vegconomist]

• San Diego-based Algenesis Corporation, a plant-based material science company, announces it has raised $5 million in a seed funding round

EPA and partners provide $3.3M for 14 projects in Massachusetts coastal communities [EPA]

• The US EPA announced the award of just over $3.3M in new funding for southeast Massachusetts communities and new technical assistance and partnerships with local organizations working for clean water and healthy coastal ecosystems.