April 29 to May 3, 2024
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Commentary by C4C
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$3.8 billion across 18 deals in climate ($2.2 billion), nature-based solutions ($1.5 billion), hard to abate industries ($60 million), and the blue economy ($62 million)
10 Essential Deals and Commitments:
Climate & Green Energy:
- Petrobras plans $11.6 billion green investment push for 2024-2028
- U.S Treasury plans to issue $6 billion in 48C tax credits
- Blackstone raises around $1 billion for energy Transition Partners IV
- Eiffel raises €500 million in first close of energy transition fund
Nature-based Solutions:
- BTG Pactual closes its second LATAM Timberland Fund on $1.24 billion
- German government invests €130 million in forest climate adaptation
- INOKS receives €40 million from the European Investment Fund
Hard to Abate Sectors:
- U.S DOE pledges $500 million for carbon transportation
- Germany and EU commission approve $380 million hydrogen funding plan
Blue Economy:
News and Research
Policy & regulatory highlights
- UN approves complaint process for carbon credit project harms
- Japan proposes mandatory ISSB disclosure for large firms by 2027
- EU parliament approves Net-Zero Industry Act
Climate & NbS finance
- ICVCM extends to 98% of registries
- Bloomberg launches sustainable investment screening tool
- Half of European “sustainable” funds may be invested in fossil fuels
Emerging Science
- World Benchmarking Alliance releases first Heavy Industries Benchmark
- Research in Nature Climate Change examines gap in carbon removal commitments
- Deforestation in Brazilian Amazon falls to 5 year low
C4C News and Events
Learn more about what we're doing
Capital for Climate’s 2024 Nature-based Solutions Investment Summit, presented in collaboration with Converge Capital and part of the Brazil Climate Investment Week, will begin in 2 weeks in Sao Paulo. We are excited to present 25+ leading project developers and local funds including the following 7 companies:
Many of the presenting companies and funds can also be found on Capital for Climate’s comprehensive Nature-based Solutions Investment Platform nbs.capitalforclimate.com
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Nature-based Solutions ≥ $1M
Commitments and deals
Commitments
Florida to invest $1.5 billion in biodiversity restoration [carbon pulse]
- The U.S state of Florida has announced a $1.5 billion dollar investment in biodiversity protection and water improvement - the largest single year investment ever in Everglades protection. $850 million will go towards Everglades restoration projects, and another $530 million to water quality enhancement.
Sustainable Ag VC preps for €50 million fundraise [new private markets]
- Pelica Ag, a UK-based VC firm, is targeting a $63 million raise for its debut fund focused on regenerative ag, supply chain, and food tech. The firm has already made 4 existing investments in Mad Capital, Nofence, Fa Bio and Miraterra which will be rolled into the fund.
Deals
BTG Pactual closes LATAM timberland fund ii on $1.24 billion [agri investor]
- BTG Pactual has closed its Latin American commercial timberland fund at $1.24 billion. The BTF II is a 12-year vehicle with an option for two 2-year extensions and is focused mainly on markets in Chile, Uruguay and Brazil.
German federal government spends €130 million on forest climate adaptation [table]
- The German Ministry of Environment and Ministry of Agriculture are providing €130 million for forest owners and local authorities to support climate-adapted forest management throughout the country, part of the Natural Climate Protection Action Program.
CP Kelco invests $60 million in citrus fiber production [foodbev]
- CP Kelco has finalized its second citrus fiber production line in Brazil, with the help of a $60 million investment. The company uses citrus peel waste to create sustainable fiber products.
INOKS Capital receives €40 million from EIF [new private markets]
- INOKS Capital's agricultural transition fund has received a €40 million anchor investment from the European Investment Fund. The vehicle is an article 9 impact fund focused on enhancing sustainable production and consumption in Eastern and Southern Europe.
Aviva pledges $4.39 million to Nature Conservancy Canada for offset projects [carbon herald]
- Aviva has pledged CAD$6 million ($4.9 million) to support targeted restoration and conservation projects across Canada as part of its nature-based carbon sequestration drive. The funds are expected to conserve 900 hectares of forests, grasslands and tidal marshes.
- Green Star Royalties has announced a $5.6 million deal purchasing royalties from a suite of Improved Forest Management carbon projects in the southeastern United States from NativState. The company expects the royalties to pay out over the next 20 years.
HeavyFinance signed deal for 300,000 hectares of Ukrainian regenerative agriculture [agri investor]
- HeavyFinance plans to enroll 300,000 HA of Ukrainian farmland to a regenerative agriculture program, with financial figures to be announced. The company, which uses a crowdfunding platform to fund the transition to regenerative agriculture, will not draw capital from existing funds but will seek new crowdfunded investments for the program.
Climate Finance ≥ $100M
Commitments and deals
Commitments
- Petrobras has announced a 2024-2028 low-carbon budget primarily to be invested in Brazil, including $5.2 billion for wind and solar power, $3.9 billion for decarbonization, $1.5 billion for biorefining, $700 million for R&D and $300 million for hydrogen and CCUS. The company is targeting what it believes are 76.3 GW of renewable energy opportunities in Brazil.
U.S Treasury Department to issue up to $6 billion in 48C tax credits in May 2024 [utility dive]
- The US Treasury has announced it will issue $6 billion in 48C tax credits with the round of funding to open in May. $2.5 billion of the funding will go to communities impacted by the closure of coal-fired power plants, and the tax credits will be used to develop clean energy manufacturing infrastructure.
Encavis board approves €2.8 billion buyout by KKR & Co INC [renewables now]
- The board of German wind and solar park company Encavis has recommended shareholders accept KKR & Co Inc’s total takeover of the company. Viessmann group is a co-investor on the buyout, which will not take place until regulatory clearances are in place.
Deals
- Blackstone’s Energy Transition Partners IV has raised approximately $1 billion over the past 2 quarters, bringing the total amount raised to $3.24 billion, more than half of its $6 billion target. The fund has a mandate for investments including clean power generation, electric transmission, and energy efficiency projects. Midstream oil and gas projects are allowed but upstream fossil fuel opportunities are prohibited.
Eiffel raises €500 million for first close of energy transition fund [new private markets]
- Eiffel Investment roup has raised around €500 million in its first close for its Energy Transition Debt strategy, halfway to its €1 billion target. The strategy will provide short term funding for mid-sized OECD developers of projects related to energy transition, aiming to intervene when long term financing is not yet in place.
NextEnergy holds second close of $265 million for 5th strategy [business wire]
- NextEnergy Capital has held its second close for its NextPower V ESG fund, raising $265 million. The fund focuses on solar infrastructure in OECD markets, and aims to eventually avoid an estimated fuel consumption of 220 million cubic meters of natural gas annually.
- energyRE has secured $155 million in project financing and a $85 million tax equity commitment for its 108 MWdc Lone Star Solar project and 198 MWH Battery Energy Storage System, which are expected to be operational by fall of 2024. Santander acted as the coordinating lead arranger and Bank of America provided $85 million in tax equity.
Biden Administration invests $71 million in tribal electrification [doi]
- The U.S Department of Interior will provide $71 million to help tribal communities electrify their grids, the second round of funding under the Tribal Electrification Program. The program aims to provide electrification to un- and under-electrified native communities and decarbonize existing electric grids by 2035.
Arbol raises $60 million to scale parametric climate risk insurance offerings [ffnews]
- Arbol has completed a series B funding round co-led by Giant Ventures and Opera Tech Ventures with participation from Mubadala, to fund the company's parametric insurance for climate related disasters. The funding will help the company expand its product offerings into the agricultural and renewable energy sectors.
Hard to Abate Sectors ≥ $1M
Commitments and deals
Commitments
DOE pledges 500 Million for carbon transportation [carbon herald]
- The U.S DOE has announced it will make $500 million available to support the development of CO2 transportation infrastructure throughout the U.S. The funding will be provided through the Bipartisan Infrastructure Law, and will be distributed through the DOE's Office of Fossil Energy and Carbon Management. The funding is expected to be used with the goal of growing the current carbon transport capacity of 60 million metric tons by 6 to 30 times.
Germany, EU commission approve $380 Million hydrogen funding scheme [carbon credits]
- The EU commission has approved a $380 million German scheme for boosting renewable hydrogen production, which would be operated through the European Hydrogen Bank's "Auctions-as-a-Service '' tool. The project aims to establish 90 MW of electrolysis capacity and incentivize the production of approximately 75,000 tons of renewable hydrogen.
Deals
Frontier buyers signs $58.3 million offtake deal with Vaulted Deep [pr newswire]
- Frontier has facilitated an offtake agreement with Vaulted Deep, an organic waste deep underground permanent storage company, for 152,480 tons of CO2 sequestered between 2024 and 2027. The agreement is expected to cost $58.3 million and enable Vaulted to commission three new wells to optimize feedstock availability.
Klarna invests $2M in CO2 removal-focused climate fund [pr newswire]
- Klarna has announced $2 million worth of funding as part of its Climate Transformation Fund collaboration with Milkywire. The money will provide funding to 13 new impact-focused carbon removal companies, and comes from Klarna's internal carbon tax.
Blue Economy ≥ $1M
Commitments and deals
Deals
Bluefront Equity Launches Fund 2 with $50 million and $150 million target [agri investor]
- Bluefront Equity has launched its second seafood fund with a target of $150 million and $50 million in already committed capital. The fund will target companies that focus on improving the sustainability of the fish farming industry.
EIB committees €10 Million to water fund [new private markets]
- The European Investment Bank has commited €10 million to the Water Access Acceleration Fund, a blended finance impact fund that aims to improve access to sustainable water systems in Africa.
Cetasol secures €2 million seed round for blue economy focused tech
- Cetasol, a maritime energy efficiency company, has closed a seed round of €2 million with funding by Sarsia, ShipsFocus, and Impact X Capital. The company develops AI technology to help mitigate excess fuel use caused by human error in shipping.
- Seychelles has launched the Ocean's resolve program, which will be funded by the Global Fund for Coral Reefs for an undisclosed sum over the next 7 years. The program aims to encourage private sector involvement in the conservation and protection of coral reefs, and will include expanding the country's Business and Technology Incubator to include coral-positive SME's, and conceptualizing a Blue Enterprise Fund.
Research and Knowledge Sharing
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Policy and Regulations
Japan proposes mandatory ISSB disclosure [responsible investor]
- The Japanese Financial Services Agency has made 2 proposals for a timeline of requiring sustainability disclosure along the lines set by the International Sustainability Standards Board (ISSB). One proposal will require companies with a market cap of ¥3 trillion ($19.3 billion) or more to begin applying standards from march of 2027, with companies with a market cap of YEN ¥1 trillion applying it the following year, while an alternate proposal would move the timeline back one year.
UN approves carbon credit complaint process [barrons]
- The UN has announced new rules for claims of harm by carbon projects, authorized under the Paris agreement. The new framework sets guidelines and safeguards for preventing the exploitation of communities that live in and around carbon credit projects.
U.S considering green bond sales [business times]
- The US Treasury is consulting with an advisory group to assess whether the government should begin selling green bonds. The option was raised in the Treasury's May 1 quarterly refunding announcements. The U.S remains the only major sovereign-debt issuer in developed markets that has not issued green bonds.
IIGCC releases sovereign bonds and country pathways discussion paper [iigcc]
- The IIGCC has released its Sovereign Bonds and Country Pathways working group discussion paper, providing guidelines for sovereign bond target setting and implementation guidance. The paper provides guidance on advantages and risks for investors in using sovereign bonds in net zero strategies, and steps that could be taken to improve the market infrastructure.
USDA Forest Service publishes climate action progress [fsusda]
- The USDA Forest Service has provided an update to its Forest Service Climate Action Tracker, providing information on the Service’s progress towards its climate goals.The update was paired with a new definition and inventory of old-growth forests under the Service's revised inventory.
Canada publishes results of blue economy survey [canada]
- Canada has published the results of its 2022-2023 consultation with Canadian citizens and industry on how to improve the country's blue economy regulations and industry. The government aims to use the information to help develop a roadmap for building a sustainable blue economy.
EU Parliament approves Net-Zero Industry Act [pv tech]
- The EU parliament has approved the Net-Zero Industry Act, which aims to help produce 40% of the bloc's annual deployment needs in net-zero technologies by 2030. The act will simplify the renewable permitting process, set out maximum project timelines, and create the Net-Zero Acceleration Valleys initiative, which speeds up permitting by delegating evidence collection to member states.
Florida opens blue economy office [florida politics]
- Florida has announced the creation of a state Office of Ocean Economy, focused on supporting research, innovations and strategies for expanding the state's ocean industries, and quantifying their economic and environmental impacts. The OOE will study methods of improving the state's maritime economy, promote Florida's maritime industries, coordinate with universities to promote academic research and provide education to other state organizations on ocean issues.
African leaders call for $120 billion in climate financing [reuters]
- A consortium of African leaders have called for investments in the continent's climate transition through the International Development Association, a low interest World Bank facility supporting developing countries adaptation to climate change. The countries called for investments of at least $120 billion to help their debt-burdened governments adapt to climate change. The target represents an increase from the previous round of fundraising, which raised $93 billion.
Report finds 91% of EU cities are interested in NbS for adaptation [euronews]
- A report from the European Environment Agency on European city level approaches to climate change has found that 91% of 19,000 surveyed climate action plans included nature based solutions as a response to needed climate adaptation challenges. The study found that larger cities were generally the frontrunners in initiatives, but some smaller cities also had taken innovative and effective action.
Finance Research and Updates
Carbon Credit standards approval extends to 98% of market verifiers [reuters]
- The ICVCM has added Verra and Architecture for REDD+ Transactions (ART) to its list of verifiers that meet the Core-Carbon Principles rulebook, bringing the share of covered entities in the carbon removal verification market to 98%. This marks the first step in an ongoing process of attempting to improve the quality and transparency of credits issued through the VCM. The ICVCM has announced plans to review carbon removal methodologies next, with first decisions to be announced in June 2024.
Bloomberg launches sustainable investment screening tool [market media]
- Bloomberg has announced the addition of a new Bloomberg Terminal tool for screening funds and indices based on customized sustainability criteria. The company aims to provide users with the capability to bring portfolios in line with emerging regulatory obligations, among other benefits.
Pepsico biodiversity shareholder proposal gathers large investors, gets 18% of votes [responsible investor] [carbon pulse]
- 18% of PepsiCo shareholders backed a resolution requiring the company to disclose its biodiversity impacts on Wednesday, May 1st. The Vote received backing from major institutional investors including Norges Bank Investment Management, Allianz Global Investors, and Storebrand Asset Management.
Half of European "sustainable" funds are invested in fossil fuels, new report finds [nl times]
- Trouw, using research by Platform Investico and Follow the Money, found that, out of 1300 European funds with sustainability in their titles, half were found to contain investments in oil, gas, or coal companies. The total investments totaled more than €7 billion across Europe.
Citi almost halfway to 2030 sustainable finance target [utility dive]
- Citi's 2023 ESG Report claims that the company has financed and facilitated $441.2 billion in sustainable financing, nearly halfway to a $1 trillion 2030 goal. The company has surpassed five of eight operational footprint goals for 2025, and claims that Inflation Reduction Act-spurred investments were a major factor in the company's success.
Emerging Science
Brazilian Amazon Deforestation falls to 5 year low [mongabay]
- Deforestation in the Brazilian Amazon has fallen to a 5 year low, according to INPE data. 4,816 square kilometers were deforested in the 12 months beginning in April 2023, 53% below the previous year's level. The drop occurred despite a severe drought, which has caused an increase in forest fires throughout the biome.
Study finds diverse forests respond better to climate change [earth]
- A study in Science Advances based on analysis of 57 years of inventory data across Canada from 1958 to 2015 finds that diverse forests are better able to cope with environmental stress than monoculture forests. The study used a robust statistical approach to account for differences between sites, and found that increasing diversity from monoculture boosted productivity by 13%, despite the long term productivity of dryland forests decreasing at an average rate of 1.3% per decade.
- The World Benchmarking Alliance has released its first Heavy Industries Benchmark assessing and ranking 91 companies globally on their climate impact and decarbonization journey. The companies included 12 in aluminum, 34 in cement, and 45 in steel production.
Study finds respect for conservation zones required to make mangrove forestry sustainable [mongabay]
- A new study in the Journal For Nature Conservation based on more than 100 years of 10-year forestry management plans in the Matang Mangrove Forest Reserve in Malaysia finds that mangrove forestry can successfully maintain ecosystems as long as large percentages are set aside for conservation, and harvest intervals are long enough. The study found that recent declines in yields and forest cover were due to encroaching on the 20% of the reserve set aside from harvesting.
New York Times examines Brazilian reforestation projects [nytimes]
- The New York Times has published an article highlighting the work of Re.green and Mombak, two reforestation companies leveraging carbon finance to reforest degraded land in the Brazilian Amazon. The article highlights the infrastructure both companies are developing to ensure forest resiliency and biodiversity, and guard against fire. Both Mombak and Re.green will present investment opportunities at Capital for Climate's upcoming Nature-based Solutions Investment Summit in Sao Paulo.
New paper quantities carbon removal gap [phys]
A new Study in Nature Climate Change led by MCC entitled "The Carbon Removal Gap '' finds that the amount of CO2 removal set forth in national plans was insufficient to meet the 1.5° centigrade warning limit set by the Paris agreement. The study found that if national targets were fully implemented, human-induced CDR would only increase by a maximum of 1.9 gigatonnes by 2025, in contrast with the 5.1 gigatonnes required by the IPCC for a 1.5° centigrade scenario.
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