May 13 - May 17, 2024

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Commentary by C4C

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Summary: $19 billion across 15 deals in climate ($19 billion), nature-based solutions ($17 million), hard to abate industries and the blue economy.

10 Essential Deals and Commitments:

Climate & Green Energy:

• Honda doubles sustainability spending pledges by 2030 to $65 billion
• Italy raises €9.7 billion in record green bond issuance
• Africa clean cooking summit secures $2.2 billion in funding pledges
• Plug power receives $1.66 billion in provisional loan commitments from DOE LPO
• AFDB launches €500 million 4 year green benchmark
• CPP invests $135 million in Indian clean energy production

Nature Based Solutions:

• USAID expands NbS funding initiatives in the Pan-Amazon region
• Mekong Capital invests $5 million in regenerative agriculture firm HUSK

Hard to Abate Emissions:

• Saudi Aramco makes an undisclosed investment in Spiritus direct air capture tech

Blue Economy:

• European Commission selects 20 blue economy champions for advisory support

Essential Climate and NbS News:

Policy & Regulatory Highlights:

• Wood Mackenzie analysis predicts a Trump 2024 victory could set transition back $1 trillion
• Japan Passes Carbon Capture Legislation
• The US FERC overhauls transmission rules in bid to increase capacity

Climate & NbS Finance:

• SBTI sets out a new timeline for Corporate-Net-Zero Standard Revision
• Chinese compliance carbon credits reach highest price level ever
• First shariah compliant carbon credits are launched by XTCC  

Emerging Science:

• The IUCN releases a new urban nature index for cities across the world
• A new study in Nature finds wildfires may change soil composition and increase carbon and toxic chemical emissions
• Nature study examines replicable techniques for monitoring ecosystem restoration success

C4C News and Events

Learn more about what we're doing

Capital for Climate is grateful for the robust attendance at the 2024 Brazil Nature-based Solutions Investment Summit, and for our sponsors, supporting partners, research partners, and presenting companies & funds. We were thrilled by the tremendous interest in Brazilian Nature-based Solutions investing from local and international investors attending, and proud of the exciting panels and opportunities presented throughout the day.

Look forward to exclusive content from the day’s events and this weeks site visits to NbS projects throughout Brazil when our newsletter returns after memorial day.

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Climate Finance ≥ $100M

Commitments and deals

Commitments

Honda commits to double sustainability spending to $65 billion [reuters]

• Honda has pledged to double its electrification investment to $65 billion over 10 years though 2030, doubling an April 2022 pledge. The company plans to launch 7 models in its EV series by 2030.

Zambia seeks $34.7 billion for climate adaptation plan [xinhua]

• Zambia has formulated a $34.7 billion plan to implement its climate adaptation goals, which it announced at a climate finance symposium in the country. The plan will cover increasing the country's climate resilience as well as other transition activities.

Africa clean cooking summit secures $2.2 billion in funding [carbon herald]

• The first Africa Clean Cooking Summit, held in Paris, secured $2.2 million in pledges from the government and private sectors to help support the transition to sustainable cooking fuels. The summit was chaired by the governments of Tanzania and Norway, the AFDB. The IEA aims to secure $4 billion annually to support clean cooking by 2030.

Plug power receives $1.66 billion from DOE [doe]

• The U.S DOE's Loan Programs Office has made a conditional commitment to provide Plug Power up to $1.66 billion in loan guarantees to help finance the construction of 6 electrolyzer facilities across several states. The company is expected to develop a community benefits plan for each facility, and be compliant with the Justice 40 initiative.

Eversource capital seeks $1 billion for indian climate investments [livement]

• Eversource Capital, an Indian climate fund, is seeking $1 billion for its next climate  impact fund, which will invest in other Asian countries. The fund will invest across water, food, agri-value chain and recycling. The company's first fund, which raised $741 million in 2022, has invested across 7 companies so far.

Invesco Launches $500 million climate bond fund [funds-europe]

• Invesco has launched a climate change adaptation fund in emerging markets and developing economies, which aims to mobilize $500 million over the next 9 months. The fund has a term of 12 years, with a 7 year investment period across multiple adaptation sectors, including food security, agriculture, coastal zones, urban infrastructure, water collection and management, energy and nature based solutions.

TSMC lists $355 million in green bonds [focus taiwan]

• Taiwan Semiconductor ManufacturingCO listed NT11.5 billion ($355 million) in green bonds on the Taipei Exchange. TSMC has said the proceeds will be earmarked for green architecture projects.

Deals

Italy raises €9.7 billion from green bond [environmental finance]

• Italy has issued a $9.7 billion sovereign green bond, the largest ever to date. The 14 year bond had an orderbook over €84 billion. 50% of the proceeds will be allocated to energy efficiency projects, with 30% for clean transportation. Pollution prevention and environment protection will be allocated 8% each, with 5% allocated to research.

EDF secures $6.3 billion to continue operating reactors [nei magazine]

• EDF has signed agreements for $6.3 billion in loans to extend the life of its existing nuclear plants as part of its Grand Carenage life extension programs. The upgrades also include new safety measures prompted by the Fukushima Daiichi accident. The program is expected to cost €49.4 billion over the course of its life.

Saudi Arabia provides $1.5 billion to TPG climate fund [bloomberg]

• Saudi Arabia will back TPG's climate vehicle with $1.5 billion, with the investment coming from the state's Hassana Investment Co. The majority of the commitment will go to the TPG Rise Climate Transition Infrastructure Fund, with the remainder allocated to the TPG Rise Climate II Fund.

ADB launches €500 million 4 year green benchmark [afdb]

• The African Development Bank (AfDB) has launched and priced an inaugural €500 million 4-year Green benchmark, the second of the bank's green bonds issued under its new system.

Convivo Hotels issues €500 million green bond [hospitality investor]

• Convivo Hotels has issued a €500 million green bond with a 9 year maturity. The bond was oversubscribed 4x and will be used to finance or refinance the company's portfolio of green hotels.

Norrsken VC raises $345 million for impact venture fund

• Norrsken VC, an early state impact investor, has announced a raise of €320 million in the final close of its second fund, which is focused on impact entrepreneurship across climate tech, energy, biotech AI and health tech. The raise was well over a €250 million target, and was backed by nearly 50 LPs.

New York State invests $300 million in climate resilience [Governor NY]]

• The State of New York will provide $300 million in climate resiliency funding to protect vulnerable and at risk communities from climate effects. The investment was announced at the Vatican's Climate resilience summit, and will be provided through existing programs, including the Water Quality Improvement Project Program, and the Climate Smart communities program.

USDA announces $250 million in climate &  wildfire resilience [usda]

• The USDA will invest $250 million across 31 states and 158 projects to help develop community wildfire plans and manage vegetation to reduce catastrophic fire risk from climate change. The plans will be developed in partnership with local municipalities, state governments, and tribal governments.

CPP invests $135 million in Indian clean energy projects [real assets]

• The Canada Pension Plan Investment Board (CPP Investments) has invested $135 million in funding for Enfinity Global's projects in India. The solar and wind projects spread across 5 Indian states are expected to be commissioned between 2025 and 2026 and will generate 2.4GWh of clean electricity annually when operational.

DOE invests $71 million in solar manufacturing [doe]

• The U.S DOE will invest $71 million on solar supply development including $16 million in Bipartisan Infrastructure Law funding across 18 projects in 10 states. The projects are targeted to help fill gaps in the domestic solar manufacturing supply, including silicon ingot and equipment manufacture.

Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

USAID expands Amazon initiatives [usaid]

• USAID has announced 3 new efforts across the pan amazon region to support sustainable development, conservation, and reforestation. The projects include a program in Ecuador working with 7 southern Amazonian indigenous groups across 4.2 million hectares, using $4.8 million in previously appropriated funding. The Amazon Biodiversity Fund, which USAID has previously funded, will also invest in 2 new initiatives, with $3.4 million to support 200 hectares of agroforestry and 600 hectares of restoration through the “Cacau Amazonia+” program, and another project providing $3.8 million to Belterra to support small and medium sized producers.

Deals

Agriwebb closes $7.2 million funding round [beef magazine]

• AgriWebb, a beef cattle production software provider, has announced a successful close of $7.2 million in its most recent funding round. The round attracted increased investments from existing backers as well as a new investment from Munters Group. The funds will be used to enhance the company's platform, and connect on farm data with global brands.

Mekong Capital invests $5 million in HUSK [deal street asia]

• Mekong Capital has announced a $5 million investment in HUSK, a biochar and bio fertilizer company focused on regenerative agriculture practice in Southeast Asia. The company will use the proceeds to streamline its Cambodian operations and prepare for expansion into Vietnam.

Ireland invests  €2.8 million in local biodiversity projects [gov.ie]

• Ireland will invest €2.8 million ($3 million) across 233 local biodiversity projects through the country's local biodiversity plan. The projects are intended to support biodiversity conservation and restoration in localities throughout the country, including invasive species control, wetland surveys, bird and bat conservation, and community biodiversity awareness and training.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Deals

Saudi Aramco invests in Spiritus direct air capture technology [morningstar]

• Sauda Aramco has agreed to invest in Spiritus, a Direct Air Capture Firm, for an undisclosed sum in a recently signed MoU. The Company also announced the receipt of equity investments from Aramco in November 2023.  The agreement seeks to help the company enhance and scale its technology to help Saudi Arabia meet its decarbonization goals.

Blue Economy ≥ $1M

Commitments and deals

Commitments

EU selects 20 "Blue Champions" [europa.eu]

• The European Commission and European Investment bank have unveiled 20 EU Blue champions who will receive advisory support to grow their business in the blue economy sector. The 20 were chosen from 70 submitted projects. The companies will receive advisory services to help sustainably expand.

ASEAN launches blue innovation challenge fund [undp]

• The UNDP has launched the ASEAN Blue Innovation Challenge, which seeks to identify, finance and support entities working towards the conservation and management of marine ecosystems, freshwater resources, and coastal areas. 60 winners will receive mentorship and other logistical support and funding up to $40,000 dollars, with submissions closing May 31, 2024.

Research and Knowledge Sharing

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Policy and Regulations

Japan passes carbon capture bill [carbon herald]

• The parliament of Japan has passed a law establishing a permit system for business operators to facilitate the implementation of CCS technology. The Legislation aims to create a favorable business environment for carbon capture in Japan, and mandates the government identify areas suitable for carbon dioxide storage. The law also requires monitoring for CO2 leaks.

Wood mackenzie finds trump win could derail $1 trillion in green investments [agweb]

• A report by Wood Mackenzie highlights that a Trump victory in the 2024 presidential race could jeopardize $1 trillion in energy investments, especially those in electric vehicles and low carbon energy production. In a worst case scenario, this could cause fossil fuel demand to peak 10 years later than currently projected, and put 2050 net zero goals completely out of reach.

EU relaxes agricultural climate rules through 2027 [euractiv]

• The EU has given its final green light to relax the environmental rules under the bloc's Common Agricultural Policy, which will last until 2027. The move is in response to agitation by agricultural interests, and was opposed by green NGOs. The regulation affects changes to many programs, including mandates for soil degradation protection, crop rotation, and minimum share for protecting non-agricultural features.

FERC overhauls permitting rules [reuters]

• The U.S Federal Energy Regulatory Commission has approved a major transmission policy update on a 2-1 vote. The new rules are designed to improve grid resilience and respond to load growth. The rules require, among other changes, that transmission owners conduct 20 year plans to assess regional electric transmission lines, and plan for how costs will be split between different entities. The order also codified rules for engagement with native american tribes in developing power infrastructure.

Florida passes legislation to ban offshore wind, de-prioritize climate change [wfit]

• Florida's legislature has passed a bill removing mentions of climate change from most state statutes, boosting the expansion of natural gas, and banning offshore wind from the area. The bill is widely seen as a major step backwards in the state's climate transition, and could enhance fossil fuel dependency in the state.

Biden Administration raises tariffs on imported solar products [e&e news]

• The Biden Administration announced major tariffs on solar panels and other products coming from Cambodia, Malaysia, Thailand and Vietnam, in a bid to protect the domestic solar industry. Bifacial panels from the countries will face a 14.25% tariff duty starting in June 2024. The tariffs are in part to get around tariff avoidance by Chinese companies operating in those countries.

ESMA launches ESG fund guidelines [mayer brown]

• On May 14, 2024, the European Securities and Markets Authority released a final set of guidelines for names using ESG or sustainability related terms.The guidelines, which were proposed in 2022, set out rules for how fund managers can describe sustainability and climate related funds, and what investments are allowed to use sustainable and other green labeling.

NY assembly passes climate superfund act out of committee [food and water watch]

• The New York state Assembly has passed the climate superfund act out of its first committee, advancing it to the Ways & Means Committee for consideration. The bill would create a 25 year dedicated fund with $3 billion in annual funding financed by levies on emission producing companies to deal with climate change damage in a similar manner to the superfund program.

Finance Research and Updates

SBTI sets out timeline for corporate net zero update [greenbiz]

• SBTI has published a timeline for its major revision of its Corporate Net-Zero Standard, which is set to take effect in 2025.The new timeline sets out deliverables for the remaining quarters of 2024, with pilot testing expected in the middle of 2025 and approval in the final quarter.

China's carbon prices exceed 100 yuan for first time [nikkei]

• China's Carbon credits are trading at a record high due to tightening environmental regulations, exceeding 100 yuan ($14) per credit in April for the first time. The current system covers around 2200 power companies.  

CEPR examines influence of nature-related risks on loan pricing [cepr]

• A Voxeu CEPR column examines the impact of nature transition risks on European lenders in the syndicated loan market. Among other findings, they found that lenders had higher exposure to nature related risk in Germany, France, the Netherlands, Spain and the UK, among other areas, and that lenders were likely charging a premium to account for biodiversity exposure risk.

XTCC announces Sharia compliant carbon credit system [fintech]

• XTCC, a carbon credit ecosystem, has launched the first shariah compliant multi-currency asset class. These credits were designed to comply with markets operating on Islamic finance principles, and have been certified by Yassar research limited.

VCM companies raised $566 million in first four months of 2024 [qcintel]

• Quantum Commodity Intelligence has found that $566 million was raised by voluntary carbon market companies in the first 4 months of 2024, though the figure rises to $1 billion if money secured by funds is included. $254 million was secured by CDR companies, with $128 million by project developers, $88 million by marketplaces, and $57.6 million by accounting platforms.

Emerging Science

IUCN releases urban nature index [unep] [iucn]

• The IUCN's new urban nature Index (UNI) provides analysis categories for policy makers and scholars. The UNI is divided into 6 themes: consumption drivers, human pressures, habitat status, species status, and governance responses, with each theme containing 5 indicator topics for 30 total items.

New paper examines post restoration ecological condition [nature]

• A new paper in Nature examines the use of Natural Capital Accounting to monitor the effectiveness of biodiversity restoration efforts under new regulatory schemes mandating and sponsoring restoration. The study, which focused on the restoration effects in the Western Australian wheat belt, trialed various reference ecosystem variables based on the studied ecosystem and other nearby ecotypes. The framework found that native woody plant restoration improved ecosystem condition by as much as 50% on ex-agricultural lands, though some elements of the methodology needed adjusting to improve accuracy over time.

Wildfires may be emitting more carbon and toxic chemicals than assumed, by changing soil composition: Study [the hill]

• A new study in Nature Reviews Earth and Environment finds that wildfires may be releasing more carbon dioxide and toxic chemical residues than previously thought, due to the wildfires changing the composition of the soils of burned forests. The wildfires were found to have doubled the concentration of toxic polycyclic aromatic hydrocarbons, which damaged the ability of forests to recover.

UNFCCC releases new coastal blue carbon recommendations [wetlands]

• The UNFCCC has released new guidance for how parties to the UNFCCC can advance coastal nature based solutions to combat climate change and adapt to climate effects.

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