April 1 to April 5, 2024

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Commentary by C4C

In this issue: $32.5 Billion across 20 deals in climate ($28.9 Billion) and nature-based solutions ($3.6 billion), and hard to abate industries ($45 million).

10 Essential Deals & Commitments to know

1. MUFG triples its sustainability investment target to $660 billion by 2030
2. The US EPA releases $20 billion in grants to establish regional green banks
3. US DOE releases $4 billion clean energy tax credits across 100 projects
4. Brazil signs a $2 billion contract from its green fund to support transition projects throughout the country
5. USDA announces $1.5 billion for climate smart agriculture
6. Solarig plans to invest $850 million in Spanish sustainable aviation fuel production
7. Quinbrook closes a $600 million solar + storage continuation fund
8. Greenbacker Capital Management Invests $100 million in Lightshift
9. The Ikea Foundation plans $100 million in investments in emerging market electrification
10. ION receives $45 million investment from Chevron for carbon capture

Policy and Regulatory updates:

• Saudi Arabia releases new Green Finance Framework to mixed reaction
• Ireland finalizes legislation for its Climate and Nature Fund
• Brazilian agribusinesses support bill attempting to remove protections from wetlands and savannahs

Climate & NbS finance:

• Mizuho plans to offer decarbonization-linked real estate loans
• Study finds green spending not even at 50% of needed levels
• RMI and global banks launch Pegasus Guidelines for airline emissions and financing

Emerging Science:

• New study finds tree selection can increase afforestation carbon sequestration 25%
• WRI releases 2023 Forest Pulse Report
• UN Food Program estimates food waste generates 8-10% of global GhG emissions and causes $1 trillion in yearly economic loss

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C4C News and Events

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Nature-based Solutions ≥ $1M

Commitments and deals

Commitments

Chilean national fund plans $100 million in climate investment [carbonpulse]

• The Chilean national fund has presented a proposal for $100 million in financing for enhancing protected areas through the Chile Nature Fund. The $100 million endowment will focus on supporting biodiversity protection projects and close the massive nature funding gap that Chile currently has.

Deals

Ducks Unlimited wetland campaign passes $2 billion [prnewswire]

• Ducks Unlimited, a wetland conservation group, has raised $2 billion for its North America-wide conservation initiative. The funding will be used to conserve wetland habitat and increase its resilience and carrying capacity for waterfowl.

USDA makes $1.5 billion available for climate-smart agriculture [USDA]

• The USDA has announced $1.5 billion in available funding for fiscal year 2024 for the agency's Regional Conservation Partnership Program, funded by the Inflation Reduction Act.. Eligible priorities are climate-smart agriculture, urban agriculture, conservation and environmental justice.

Biden Administration announces $25 million for Arizona wetlands [department of interior]

• The Department of the Interior will provide $25 million to improve water and climate resilience and restore ecosystems in Arizona. The projects will help secure hydropower resources in the Southwest and improve ecological resilience of targeted wetlands, in partnership with local groups and native american tribes.

Poseidon Ocean Systems raises $21 million [seafoodsource]

• Poseidon Ocean Systems, a Canadian aquaculture firm, has raised $20.7 million in its series B financing round led by the Ecosystem Integrity Fund, to expand the company’s manufacturing capacity and support the rollout of its technology to reduce pressure on wild fish stocks.

Netzero locks in $19.4 million for Brazilian biochar [carbonherald]

• Netzero, a biochar production company, will receive $19.4 million from the French impact and infrastructure fund STOA to expand tropical biochar production. The company hopes to improve its Lajinha, Brazil-based production plant and establish a second.

Reduced raises € 6 million for recycled ingredient platform [foodbev]

• Reduced, a low CO2 fermentation startup based in Germany, has secured € million from a financing round led by Novo Holdings. The funding will be used to help scale the company's technology and secure production capability.

Terragia Biofuel raises $6 million [esgtoday]

• Terragia biofuel, a cellulosic biomass  ethanol startup, has raised $6 million in an initial seed financing round. The company will use the proceeds to expand its thermophilic microorganism-based ethanol production technology and scale business operations.

Climate Finance ≥ $100M

Commitments and deals

Commitments

MUFG triples 2030 sustainability target to $660 billion [esgtoday]

• Mitsubishi UFJ Financial Group has announced plans to triple its 2030 sustainable financing goal to ¥100 trillion yen ($660 billion) and establish a Sustainability Risk Office. This marks the second increase of its ESG strategy, and at least half of the fund will be targeted specifically to environmental issues. The company emphasized climate impact, natural capital loss, and human rights diligence as main areas for increased focus and investment.

Deals

EPA announces $20 billion in grants for Greenhouse Gas Reduction [epa]

• The U.S EPA has made its long awaited selections for entities to administer $20 billion in catalytic decarbonization and community energy investment capital through the Greenhouse Gas Reduction Fund. The $14 billion National Clean Investment Fund tranche, which focuses on building clean financing institutions that provide clean energy investment capital at scale, was distributed between 3 entities, all of which were required to dedicate 40% or more of capital to low-income and disadvantaged communities:
  • Climate United Fund received $6.97 billion in awards;
  • Coalition for Green Capital $5 billion;
  • and Power Forwards Communities Coalitions $2 billion.
• The smaller Clean Communities Investment Accelerator ($6 billion), which will establish technical assistance and funding hubs for community lenders working in low-income and disadvantaged communities, was split among 5 selectees, with 100% of Capital dedicated to disadvantaged communities.
  • Opportunity Finance Network received $2.29 billion;
  • Inclusiv $1.87billion;
  • Justice Climate Fund $940 million;
  • Appalachian Community Capital $500 million;
  • and Native CDFI Network $400 million.

DOE announces $4 billion clean energy tax credit program [spglobal]

• The U.S Department of Energy has announced plans to invest $4 billion in tax credits in 100 clean energy projects in former coal communities under the Qualifying Advanced Energy Project Tax Credit, part of a $10 billion Inflation Reduction Act program. The funds will be delivered to projects including the Rockwell Giga 1 Fuel Cell Project in Texas developed by Ballard Power Systems, and NOVONIX's Critical battery production facility in Tennessee.

Brazilian Government signs $2 billion contract from Climate Fund [government of brazil]

• The Brazilian Ministry of The Environment and BNDES have announced a new contract for managing the Brazilian Climate Fund, with BRL 10.4 billion ($2 billion) being transferred into the fund to finance green projects throughout the country. The funding came primarily from a 2023 $2 billion green bond issuance. Six modalities are eligible for climate funding: resilient and sustainable urban development; green industry; transport logistics, public transportation and green mobility; energy transition; native forests and hybrid resources; and green services and innovation.

Valeo announces $924 million green bond issue [valeo]

• Value has placed €850 million ($924 million) in green bonds, issued under the company's Green and Sustainability-linked Financing framework. The funding will primarily be utilized for financing projects in low-carbon mobility and vehicle electrification.

World Bank approves $750 million climate change loan to Colombia [reuters]

• The World Bank has approved plans for a $750 million loan to Colombia to help the country implement its climate change agenda. The investment is focused primarily on green energy investment, green hydrogen exploration, and electric transport expansion.

Quinbrook closes $600 million solar + storage ‘Continuation Fund’ [businesswire]

• Quinbrook has announced a successful close of its Quinbrook Valley of Fire Fund with $600 million in commitments. The lead investor was Blackstone Partners, and the fund focuses on investing in solar + storage and other energy transition projects.

ISIF invests €278 million ($290 million) in 3 climate investment funds [siliconrepublic]

• The Ireland Strategic Investment Fund has announced €278 million in climate investments, to support renewable and transition startups. €200 million of the funding will go to Copenhagen Infrastructure Partners’ flagship green energy fund, which has current commitments of €5.6 billion and a target of €12 billion. ISIF is also investing €50 million in a fund managed by Impax Asset Management group, and €30 million into ArcTern Ventures Fund III.

Greenbacker provides $100 million to Lightshift [greenbackercapital]

• Greenbacker Capital Management will invest $100 million in Lightshift Energy, split into a $20 million growth equity investment in sustainable infrastructure platforms, and $80 million investment in sustainable infrastructure assets. The funds are expected to be used to expand Lightshift's footprint of American battery projects.

Ikea foundation invests $100 million in emerging market electric vehicle access [esg today]

• The IKEA foundation will invest $100 million in the Leapfrogging Partnership, which aims to help emerging markets expand their electric vehicle fleets. The project, which is supported by Climateworks Foundation, aims to accelerate the transition to full electrification of all road vehicles in  emerging markets, and reach a 2050 fleet electrification target.

Alysm announces $78 million funding round [businesswire]

• Alysm Energy, a rechargeable battery developer, has announced a $78 million funding round raise jointly led by Tata Limited and General Catalyst. Thrive Capital and Thomvest also joined in the round. The funds will be used to scale the company's battery production operations.

US government to invest $19 million in solar canals [doi]

• The Department of the Interior has announced a $19 million investment in installing solar panels over irrigation canals in California, Oregon and Utah. The solution aims to reduce canal evaporation and water scarcity while also providing clean power to surrounding areas.

Iceberg Data Lab raises $10 million [esgtoday]

• Iceberg Data Lab, an environmental data provider, has raised $10 million in series A funding, with proceeds earmarked to expand and strengthen product offerings. The Paris-based company provides data solutions for financial institutions to measure and monitor environmental metrics, and aims to continue expanding to financial majors.

Hard to Abate Sectors ≥ $1M

Commitments and deals

Commitments

Solarig plans $850 million sustainable aviation fuel plant [esgtoday]

• Solarig has announced plans to invest $847 million in a new Spanish sustainable aviation fuel plant in Spain. The plant aims to take advantage of emerging EU regulations requiring 70% of SAF usage by 2050, and IRA tax incentives for SAF use.

Torus secures $67 million to advance energy storage and management [businesswire]

• Torus, an energy storage development company, has secured a $67 million round led by Origin Ventures. The funds are expected to be used to help expand the company's virtual power plant and energy storage systems in the Western United States.

Deals

ION Clean Energy receives $45 million investment from Chevron [businesswire]

• ION Clean Energy has received $45 million from Chevron New Energies and Carbon Direct Capital to support the company’s ICE-31 liquid amine carbon capture system. The funding will be used to help scale and deploy its systems for reducing emissions in hard-to-abate.

Research and Knowledge Sharing

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Policy and Regulations

Japan's Financial Services Agency publishes impact investing framework [responsible investor]

• The Japanese Financial Services Agency has published a new governing framework for impact investing that aims to standardize definitions for impact investment throughout the country. The document however, doesn’t set  eligibility criteria, thresholds or KIP's for impact focused investments, and while requiring public disclosures from investors, it does not provide details on the scope of reports.

Legislation for Irish Climate and Nature Fund finalized [rte]

• The Irish government has published legislation underlining the Future Ireland Fund and Infrastructure, Climate and Nature Fund, which were established in the 2024 budget. The draft plan calls for .8% of GDP being invested in the fund, which will make investments to support climate change mitigation and adaptation and the country's climate goals.

Saudi Arabia releases new Green Finance Framework [environmental finance]

• Saudi Arabia has published a new green financing framework building off the Sovereign Wealth Funds 2022 green bond issuance. The Framework identifies 8 eligible green categories and 23 potential impact indicators to determine green bond eligibility, with a second party opinion provided by moodies. The framework identifies blue and green hydrogen projects; direct air carbon capture; water desalination, and artificial aquifer recharge and storage. The framework also contains provisions for green sukuk, a Sharia-compliant instrument similar to a bond.

EU ag ministers support Austrian challenge to EUDR rules [feed navigator] (Courtesy of Nature for Climate)

• 20 out of 27 EU Agriculture ministers have announced support for proposed changes to the EU deforestation regulation, with the country being particularly opposed to the risk benchmarking system included in the legislation.

Canada raises Carbon Tax to CAD80 per ton [carbon herald]

• Canada has increased its carbon tax price for CAD65 to CAD80 a ton, as part of the county's updated carbon management strategy. The rebate provided to each canadian family based on the proceeds will also increase.

Final approval for EU Nature Restoration Law elusive as Finland and Poland harden positions [euractiv] (Courtesy of Nature for Climate)

• The EU Nature Restoration Law’s future remains in doubt as Poland and Finland move towards a more solid opposition to the legislation. Despite acknowledging the long term interest of Polish farmers in the legislation, Poland's Prime Minister announced the decision to vote against it, as did Finland, leaving Austria and Belgium as the only current abstentions that could potentially rescue the law.

Brazilian agribusiness interests push bill to pre-emptively block grassland protections [mongabay] (Courtesy of Nature for Climate)

• A bill that would drastically alter the Brazilian Forest Code has moved into general consideration in the Brazilian legislature, which would exclude non-forest native ecosystems from forest law protection, potentially opening vast areas of wetlands in the Pantanal and grasslands in the Pampas to exploitation without government oversight. The future of the bill is unclear, but mobilization is expected to be needed to avoid its passage.

Finance Research and Updates

Cerrado was main beneficiary of 2021 deforestation pledge [mongabay]

• The IFACC (Financial Innovation for Amazonia, the Cerrado, and Chaco) program, which was launched at COP26 in 2021, has primarily distributed its funding to support the Cerrado, with $234.5 million distributed so far. This funding is especially vital as deforestation has been increasing in the Cerrado recently, with 1.1 million hectares cleared in 2023.

Citibank finds 71% of energy clients lack transition plans [utility dive]

• Citigroup has found that 71% energy sector clients lack a substantive low-carbon transition plan that covers all scopes of emissions, with 42% lacking plans at all, and 29% lacking clear plans for implementing them. The bank will continue to disclose its clients' progress going forward, in the hope of driving adoption and execution of plans.

German Climate and Transformation Fund lags in distribution [clean energy wire]

• The German Climate and Transformation Fund continues to underspend its targets, spending only half of earmarked funds in 2023, with only €20 billion of €36 billion earmarked Euros spent. The shortfall has been criticized by the German Federal Court of Auditors and climate industries and activists.

Failures dog €40 billion innovation fund [fortune]

• The European Union's $3 billion Innovation Fund has faced difficulties with its initial investments, with hundreds of millions of the 6 billion distributed going to manufacturers that later faced financial difficulties. The fund's growing pains have raised concerns that the EU's efforts to decarbonize without deindustrializing may face major headwinds.

Mizuho to offer decarbonization linked real estate loans [bloomberg law]

• Mizuho Financial group will begin offering decarbonization-based real estate loans, with the hope of incentivising property owners and developers to cut greenhouse gas emissions.

Orbitas releases report on Brazil cattle sectors interactions with climate change [orbitas] (Courtesy of Nature for Climate)

• Orbitas has published a new analysis of how climate change will affect the Brazilian cattle sector, analyzing both the risks and opportunities presented by the climate transition. The report suggests that there is a potential for an 88% increase in investment in Brazilian agriculture due to financial transition pressures, but that the effects of climate change could decrease available pastureland by 37% compared to 2020, and cause beef production to decline by 25%.

RMI and partners launch Pegasus Guidelines for aviation emissions reporting [RMI]

• RMI, Credit Agricole, Societe General, CIB, BNP Paribas and Standard Chartered have announced the launch of the Pegasus Guidelines, a voluntary framework for the aviation sector focused on helping banks measure emission associated with investments in the aviation industry. The guidelines build on existing standards from SBTI and the International Civil Aviation Organization.

Study finds green spending not 50% of annual need [bloomberg]

• REN21's annual status report on global clean energy supply and demand finds that, while green energy spending is increasing, the pace of energy demand is limiting its effects on ameliorating climate change, with $1.3 trillion a year required by the end of the decade.

Emerging Science

Study discusses role of tree type selection in afforestation [carbon herald]

• A new study in Nature Communications Earth & Environment examines how selection of forest types in afforestation projects can increase total carbon sequestration under the right conditions. The study found that selecting carbon-intensive native forest types could increase sequestered carbon by 25% over other forest types, though sequestration could vary by region. The study also found that green investment was very regionally stratified, with 43% in China, 20% in Europe, 15% in the US and less than 4% in Africa and the Middle east.

FAS releases scope for urban forestry to combat heat island effect [fas]

• The Federation of American Scientists has released a new National Framework for Sustainable Urban Forestry to Combat Extreme Heat, as a proposal for the next incoming administration. The framework lays out methods for inventorying trees, identifying areas in need of greening, and coordinating national efforts in reducing urban heat effects, among other topics.

Global Change Biology Study finds logged forests face challenges even with restoration [mongabay] (Courtesy of Nature for Climate)

• A study in Global Change Biology has raised concerns about the ability of logged forests to recover biodiversity. The study, which examined 5000 seedlings in a logged area in Malaysian borneo, compared the seedling survival and diversity between naturally regenerated logged forests, unlogged forests, and actively restored forests 30-35 years after logging, and found that the survival rate of restored forests and naturally regenerated ones were similar, and they were significantly lower than in the unlogged forests.

WRI releases latest forest pulse report with 2023 deforestation data [wri] (Courtesy of Nature for Climate)

• WRI has released its 2023 Forest pulse, cataloging changes in forest cover worldwide. The study found that, in 2023, rates of deforestation remained steady globally, but had a startling 36% decrease in Brazil and 49% decrease in Colombia.

UN food program finds food waste causes global $1 trillion economic loss [edie] (Courtesy of Nature for Climate)

• A new UNEP report finds that food waste remains a significant drag on the global economy, with the planet wasting 1.5 billion metric tons of food in 2022, representing 20% of all available food and a waste of over $1 trillion. The study estimated that food loss and waste  also generates  8-10% of global GHG emissions.

CEEPR releases working paper: supply curve for forest-based CO2 removal [ceepr] (Courtesy of Nature for Climate)

• MIT CEEPR has released a new working paper attempting to develop a supply curve for forest-based CO2 removal. The study traces the marginal cost of forest-based atmospheric CO2 removal, and finds that over a billion tons of CO2 can be removed annually via forestation at a cost of $45 per ton, and 2.5 billion at a cost below $90 per ton.

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