What's Happening in Sustainability & ESG (Week Recap 02.01 - 08.01) 🌎
Several European countries achieved their highest share of renewables in 2023, Microsoft signed a massive supply deal for 12 GW of solar panels, and other news
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This week’s read time: 8 minutes
Welcome to this edition of Green Digest, where you will get updated about everything happening in the sustainability & ESG space in less than 10 minutes. 🌎
We go through tons of articles and data from the most reliable sources, filter & simplify them, and serve them to you in bite-sized chunks every week. 🍀
🌍 In this edition, we’ll cover:
Germany, the UK, and Portugal achieved their highest share of renewables in their power grids in 2023 ⚡️
EU announced €4 billion of state aid investments in new factories producing electric batteries, heat pumps, and solar panels 🟢
The World Bank has raised a record-breaking $5 billion through a 7-year sustainable development bond 📈
Chinese automaker BYD has surpassed Tesla as the world's largest electric car company in the final quarter of 2023 🚗
Microsoft signed a massive supply deal with QCells for 12 GW of US-made solar panels⚡️
and other news 🌍
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⭐️ The week’s top news:
Renewable energy share on Germany's power grids reached 55% in 2023, a 6.6 percentage point increase from the previous year. Offshore wind contributed the largest share at 31.1%, followed by solar at 12.1% and biomass at 8.4%. The rise was aided by capacity expansion and favorable weather conditions. Germany aims to have 80% of its energy mix come from green power by 2030, while it has ditched nuclear power and aims to abandon most of its coal generation and use its remaining gas plants mostly for grid back-up. Germany's CO2 emissions in 2023 also reached their lowest level since the 1950s due to reduced coal-fired power and output by energy-intensive industries. 🇩🇪
The UK also had its greenest year on record in 2023, with fossil fuels accounting for 35% of the energy mix, down from 43% in 2022. Renewable and cleaner energy imports from Europe, along with increased renewable energy generation in the UK, have contributed to this shift. 🇬🇧
Portugal achieved a new record in renewable energy production in 2023, with renewable power sources supplying 61% of the country's electricity. The country aims to generate 85% of its annual electricity from renewable sources by 2030. Wind energy accounted for a quarter of electricity usage, followed by hydropower, solar, and biomass. Consumption of natural gas dropped by 21%, with the majority entering through the port of Sines. European nations are increasingly turning to renewable energy due to high gas prices and geopolitical concerns. 🇵🇹
🇪🇺 The EU announced €4 billion of state aid investments in new factories producing electric batteries, heat pumps, and solar panels to accelerate the production and uptake of green technologies and combat cheap Chinese imports. The investments aim to make Europe climate-neutral and insulate the bloc from competition. The Swedish battery producer Northvolt will receive €902 million for a new factory in Germany, while France will receive €2.5 billion for clean tech factories. This is the first state aid approved under a scheme to prevent production facilities from being lured overseas with greater foreign subsidies.
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Noodle maker Master Kong collaborated with Alibaba and Veoila to cut plastic waste, showcasing how different companies can collaborate to recycle waste at scale
Master Kong, China’s largest instant noodles maker, in collaboration with Alibaba Group and Veolia, successfully recycled waste plastic bottles into new products sold on Alibaba's grocery platform, showcasing how different companies can collaborate to recycle waste at scale. Master Kong collected waste PET bottles and transported them to a processing plant. At the plant, Veolia turned the PET bottles into PET pellets, which can easily be made into new products. To complete the circle, the pellets were then used to produce goods for sale on Tmall Supermarket, an Alibaba-owned grocery purchasing platform. The carbon footprint of each PET storage box made from recycled material was also 21% smaller than if made from virgin PET material. The initiative is part of Alibaba and Master Kong's commitment to tackle plastic pollution. 🟢
💡 More interesting news:
The World Bank has raised a record-breaking $5 billion through a 7-year sustainable development bond. This transaction generated the largest order book for a World Bank 7-year bond and it aims to further progress the Sustainable Development Goals (SDGs). The bank declared that investors were attracted by the World Bank's triple-A credit rating, its classification as a high-quality liquid asset, and the use of funds for positive social and environmental impact. The bond pays a semi-annual coupon of 4% and has a maturity date of January 2031, while it will be listed on the Luxembourg Stock Exchange. 📈
Former UK Conservative Energy Minister Chris Skidmore has resigned in protest of the government's plan to enable more licensing for oil and gas production in the North Sea. Skidmore, who served as Energy Minister when the UK committed to achieving net zero emissions by 2050, criticized the government for losing its climate leadership and argued against increasing fossil fuel production. He stated that new oil and gas licenses will create stranded assets instead of supporting the transition to renewable energy. This resignation adds to the challenges faced by the Sunak government over its climate policies. 🇬🇧
Chinese automaker BYD has surpassed Tesla as the world's largest electric car company in the final quarter of 2023, selling a record number of cars (525,409 EVs). While Tesla still outpaced BYD for the year as a whole, the gap between the two companies narrowed significantly. China aims for at least 20% of new cars sold annually to be new energy vehicles (NEVs) by 2025, and it is on track to achieve this goal earlier than expected. Chinese carmakers are expanding internationally, particularly in Europe, but intense competition and a price war have impacted profit margins. 🚗
Equinor and bp have cancelled their agreement with the New York State Energy Research and Development Authority (NYSERDA) for the Empire Wind 2 offshore wind project due to changed economic circumstances, including higher inflation, interest rates, and supply chain disruptions. The project, with a capacity of nearly 1.3 GW, was part of New York's goal to have 70% of electricity from renewable sources by 2030. 🔴
The world's five largest listed oil companies, including BP, Shell, Chevron, ExxonMobil, and TotalEnergies, are expected to distribute record payouts of over $100 billion to shareholders in 2023, despite public outrage over fossil fuel profits. These bumper payouts follow a year of record profits for the oil and gas industry, driven by global energy market disruptions and extreme weather events. Financial analysts predict even greater shareholder distributions this year, although weaker commodity market prices may lead to lower profits. Critics argue that these payouts divert funds from renewable energy investments and exacerbate the climate crisis. 👀
🧐 What are companies doing?
Microsoft and QCells have announced an eight-year strategic alliance, expanding their previous agreement to supply 12 GW of US-made solar panels and services. The deal aims to support Microsoft's climate and renewable energy goals and develop a US solar supply chain. The solar modules will be produced at QCells' new factory in Georgia and they’re capable of producing power for the equivalent of over 1.8 million homes annually. ⚡️
Norwegian hydropower and renewable energy production company, Statkraft, plans to invest up to €6 billion in hydro and wind facilities, including the construction of new wind farms. The investment program aims to increase wind power production, upgrade hydroelectric power plants, rehabilitate dams, and modernize older power plants. ⚡️
Swedish lithium-ion battery producer Northvolt has received EU approval for €902 million in German state aid to build an electric vehicle battery production plant in Germany. The plant, located in Heide, will have an annual capacity of 60 GWh and is expected to start production in 2026, reaching full capacity in 2029.🔋
First Solar plans to sell up to $700 million in tax credits accumulated through the sale of solar modules to Fiserv. The tax credits are offered under the Inflation Reduction Act (IRA) to incentivize clean energy production and reduce reliance on Chinese-made components. First Solar is expected to receive $0.96 per $1 of tax credits in the first half of 2024, according to the agreements signed by the companies. The US Treasury recently announced guidelines clarifying eligible components for tax credits, including inverters and PV solar equipment. 🟢
Robeco, an international asset manager, has announced new focus themes for its corporate engagements in 2024. These include ocean sustainability, phasing out hazardous chemicals, pressuring high-carbon companies to align with climate goals, and engaging with fashion companies on sustainability issues. The company will target specific companies impacting sea life and focus on maritime pollution, overfishing, and deep-sea mining. They will also address hazardous chemicals, particularly PFAS, known as "forever chemicals." Additionally, the company declared that it will accelerate the transition of business models to meet the Paris Agreement goals and set minimum standards for emissions reporting and reductions. 📈
💸 Recent funding rounds, sustainable finance, acquisitions, and private equity:
🟢 Abu Dhabi National Oil Company (ADNOC) has acquired a 10.1% stake in UK-based carbon capture developer Storegga, marking ADNOC's first international equity investment in carbon management platforms. This investment is part of ADNOC's $15 billion initiative for low-carbon solutions, including carbon capture and storage (CCS). ADNOC aims to achieve a carbon capture capacity of 10 million tonnes annually by 2030. Storegga, with a portfolio of CCS projects across the UK, US, and Norway, will use the investment to support ongoing projects and business development activities.
⚡️ San Francisco-based Pattern Energy has secured $11 billion in financing for the SunZia Wind and Transmission projects, which are described as the largest clean energy infrastructure project in US history. The financing includes $8.8 billion in green loans and a $2.25 billion tax equity term loan facility. The projects are expected to generate over 3.5 GW of renewable energy and commence commercial operations in 2026.
🟢 Nexus Development Capital has invested $5 million in carbon removal startup Standard Biocarbon to support the launch of its biochar production facility. Biochar, produced from biomass, can sequester carbon in soil for centuries and improve soil fertility. Standard Biocarbon plans to begin production in Q1 2024, with an estimated annual production of over 12,200 cubic meters of biochar and 3,000 metric tons of captured carbon. The investment will be used to scale operations at the facility in Enfield, Maine.
⚡️ French energy company TotalEnergies has invested $300 million in a joint venture with India-based Adani Green Energy Limited (AGEL) to develop over 1 GW of solar and wind projects in India. This investment comes as India aims to increase its renewable energy investments and reduce emissions intensity.
⚡️ Macquarie Asset Management (MAM) has acquired a 50% stake in Enel Green Power Hellas, a Greek renewable energy company, for €250 million. Enel Green Power Hellas operates renewable energy projects in Greece and has a portfolio of 482 MW of onshore wind, solar, and hydropower projects. The acquisition aligns with Greece's plans to increase investment in clean energy, targeting a renewable energy capacity of over 28 GW by 2030. Macquarie has also formed a partnership with Enel Group to develop more renewable energy projects in Greece.
That’s it for this week, thanks for making it to the end! If you enjoyed reading this newsletter, please don’t forget to subscribe and share it 🍀