wind power

wind power green bond report

In the latest The Green Bond report, experts explain why hope is likely to prevail and look closer at specific challenges that need to be solved if the transition is to be able to continue gaining speed, including how investors can make a difference.

There are currently mixed signals regarding the energy transition outlook. On the one hand, it now seems unlikely that the world will be able to limit global warming to 1.5 degrees Celsius. On the other hand, there are signs that the transition is picking up speed and that the world may be close to peak emissions.

“After a year of upheavals both in energy markets and financial markets, a new, faster long-term transition trajectory is starting to take shape at the same time as the negative effects of earlier procrastination is beginning to emerge,” says Thomas Thygesen, Head of Research, Climate & Sustainable Finance, at SEB. “From a climate crisis perspective, this leaves an outlook caught between hope and despair, but we continue to believe that hope will eventually dominate.”

While an accelerated transition – driven by the technological revolution of renewable energy – can still halt emissions in time to avoid a climate disaster, it comes with significant challenges that capital markets must address. These include raising capital for energy investment and adaptation costs, especially in developing economies; expanding the supply of basic inputs to the capex boom; and providing funds for companies that are first movers in sectors with high emissions.

“Sustainable investors now need to be clear about their objectives,” says Thomas Thygesen. “If you want to have an impact, your capital must go where the market is less willing to go – like funding renewable energy and adaptation in emerging markets and providing capital for companies in hard-to-abate sectors that launch the transition using technology that is not yet ready for deployment. This requires both a longer time horizon and a higher tolerance for risks. However, there is still a place for the more traditional ‘do no harm’ strategies.”

Sustainable financing

The report also contains an update on the market for sustainable financing, showing how October marked another year-on-year decline in sustainability-themed bonds and loans despite initial optimism that the market would recoup some of this year’s losses during the third quarter. A total of USD 1,203 billion have been issued so far this year, which marks a decline of 16 percent year-on-year.

“Given that the last two months of the year usually see a lower level of activity, we now assume that the sustainable finance market in 2022 will close around 15 percent below last year’s record,” says Gregor Vulturius, Advisor at Climate & Sustainable Finance at SEB. “While all bond issuance has declined, this outcome is clearly a disappointment, suggesting we may need to broaden the range of sustainable finance instruments to attract more sectors.”

About The Green Bond report

SEB, which together with the World Bank developed the green bond concept in 2007/2008, publishes the research publication The Green Bond 5-6 times a year. It strives to bring readers the latest insight into the world of sustainable finance through various themes. Even though the report covers all kinds of products and developments in the sustainable finance market, we have decided to keep its historic name – The Green Bond – as a tribute to our role as a pioneer of the green bond market. You can find The Green Bond report here.

emissions

cop27 outcomes emissions

The United Nations Climate Change Conference COP27 outcomes result in an agreement to provide “loss and damage” funding for vulnerable countries hit hard by climate disasters. When, and how much, money will reach the affected countries remains unclear. No decisions were made to effectively limit climate change, mere ‘notes’, ‘welcomes’ and ‘calls’ fill a document reflecting a general consensus about stalling action.

Quoting the press release: Countries delivered a package of decisions that reaffirmed their commitment to limit global temperature rise to 1.5 degrees Celsius above pre-industrial levels. The package also strengthened action by countries to cut greenhouse gas emissions and adapt to the inevitable impacts of climate change, as well as boosting the support of finance, technology and capacity building needed by developing countries.

Creating a specific fund for loss and damage marked an important point of progress, with the issue added to the official agenda and adopted for the first time at COP27.

But that was about it. In the final document the words ‘coal’ and ‘fossil’ appeared only once:

13. Calls upon Parties to accelerate the development, deployment and dissemination of technologies, and the adoption of policies, to transition towards low-emission energy systems, including by rapidly scaling up the deployment of clean power generation and energy efficiency measures, including accelerating efforts towards the phasedown of unabated coal power and phase-out of inefficient fossil fuel subsidies, while providing targeted support to the poorest and most vulnerable in line with national circumstances and recognizing the need for support towards a just transition;

So the deal was far from perfect, The Guardian notes, with several key elements flawed or lacking. Some countries said the commitments on limiting temperatures to 1.5C represented no progress on the Cop26 conference in Glasgow last year, and the language on phasing out fossil fuels was weak.

Poor countries and climate campaigners rejoiced. Sir Molwyn Joseph, minister of health, wellbeing and the environment of Antigua and Barbuda, and chair of the Alliance of Small Island States, said: “Today, the international community has restored global faith in this critical process that is dedicated to ensuring no one is left behind. The agreements made in the Cop27 outcomes are a win for our entire world.

We have shown those who have felt neglected that we hear you, we see you, and we are giving you the respect and care you deserve. We must work even harder to hold firm to the 1.5C warming limit, to operationalize the loss and damage fund, and continue to create a world that is safe, fair, and equitable for all.”

The two-week long conference in Sharm El-Sheikh ran more than 36 hours over its Friday night deadline, and was marked by stark division and harsh words between the rich and the poor.

At many stages, a deal looked impossible to reach. In the final hours, countries wrangled over single words in an outcome that spanned issues from the 1.5C temperature goal, the phasing out of fossil fuels, the needs and rights of indigenous people, the protection of nature, and how to engineer a “just transition” to clean energy for those economically dependent on fossil fuels.

COP27 outcomes falling short

Many felt the deal fell well short on important issues. Frans Timmermans, vice-president of the European Commission, spoke of the tortuous negotiations, which included some countries trying to unpick the 1.5C goal, and abolishing the requirement established in Glasgow for countries to update their plans on emissions every year.

“Too many parties are not ready to make more progress today in the fight against the climate crisis,” he warned. “There were too many attempts to roll back what we agreed in Glasgow. This deal is not enough [on cutting emissions].”

  “We are disappointed we didn’t achieve more. We have all fallen short” – Frans Timmermans

In the end, the Egyptian hosts drafted a compromise deal that achieved the consensus in the cop27 outcomes required under the UN rules. Sameh Shoukry, the Egyptian foreign minister and president of the Cop27 UN climate summit in Egypt, said: “We leave with stronger collective will and determination.” And he added that the 1.5C temperature limit remains within reach.

Many scientists disagree with that.

For the only success of the conference, the loss and damage fund, it is likely to take at least a year, until the next climate conference COP28 in the United Arab Emirates in November 2023, to sort through some of the details of how the fund can work. There is also, so far, little money for the fund, as few nations have made significant pledges of cash for loss and damage.

precision fermentation a food revolution

precision fermentation a food revolution

All the protein we need to feed the world can be produced on an area of land smaller than London, or the micro-state of Andorra. A food revolution too good to be true? Not according to RePlanet, the group that builds on precision fermentation to pull it off.

If we replace animal farming with protein from microorganisms, more than 3/4s of the world’s farmland could be rewilded to meet our climate goals, says green group RePlanet.

The Reboot Food campaign claims that COP27 efforts to keep the Paris Agreement alive are ‘futile’ without such a move. Author and activist George Monbiot calls for world governments to urgently invest in precision fermentation – a key technology in microbial protein production.

 “The elephant in the room at COP27 is the cow. But thankfully this time, there really is a recipe for success. By rebooting our food systems with precision fermentation we can phase out animal agriculture while greatly increasing the amount of protein available for human consumption.” George Monbiot

What precision fermentation does

Precision fermentation (PF) creates biologically identical milk, cheese, egg whites, and other animal proteins using genetically engineered microorganisms fermented in tanks.

It is a refined form of brewing that uses microorganisms to make ingredients we currently get from animals or plants. While our ancient ancestors made bread, cheese, and beer by using the microorganisms that were randomly present in their environment, today’s precision fermentation can genetically reprogramme microorganisms
to make exact nutrients. Here’s how to do it:

  1. Choose a specific microorganism such as a yeast or bacteria.
  2. Genetically engineer the microorganism with the DNA sequences coding for the amino acids which form the protein you want to create – such as the proteins found in cow’s milk: casein and whey.
  3. Put the microorganisms in a fermentation tank with some simple nutrients and sugars.
  4. Ferment! (Just like beer.)
  5. Harvest food-grade ingredients that are biologically identical to those you’d get from an animal and mix them up into sellable familiar products (like dairy milk, cream or cheese…).

According to a new analysis in the Reboot Food report, protein from microorganisms uses up to 40,900 times less land than beef, meaning that such ‘ farm-free foods’ could produce the entire world’s protein requirements on just 420km2 of land – an area of land smaller than Greater London*.

91% less emissions

This would not only save 3/4s of global agricultural land for nature restoration and carbon drawdown but would also release up to 91% less greenhouse gases per calorie produced.

The Reboot Food manifesto lays out a series of 10 policies that world governments should adopt to make COP27 a success and calls for ‘land sparing’ and planetary scale rewilding to be the new objective in agricultural decision-making. The 10 policies include: investing 2.5% of GDP over 10 years into food innovation, ending all subsidies for animal agriculture and subsidizing plant-based foods instead, banning the advertising of carbon-intensive meat, limiting patents on new food technology, and legalizing gene editing.

Such moves are urgently necessary, says RePlanet, because agriculture is responsible for more greenhouse gas than all cars, airplanes, and ships on the planet, is the cause of 80% of deforestation this century, and is the single biggest cause of the 6th mass extinction of species. Most of this harm is caused by the high land usage of animal agriculture which occupies 28% of the planet’s ice-free land, more than all the world’s forests combined.

Precision fermentation is not a new technology

Precision fermentation is already used to produce 99% of the global insulin supply and 90% of the global rennet. Today PF milk proteins and PF egg whites have already reached the US grocery market.

Joel Scott-Halkes, Campaigns Director of Replanet speaking from COP27 says “COP27 has shamefully failed to address the emissions and land use of animal agriculture. Incrementalism in farming is no longer an option – we need revolutionary food production. In the face of catastrophic climate breakdown, precision fermentation and other highly land efficient forms of food production are the bold solutions we need”

Emma Smart, Coordinator of Replanet UK says “The precision fermentation revolution is as significant and consequential for our natural world and climate as the dawn of farming was 10,000 years ago. Only this time, today’s food revolution promises a new age for non-human life of regeneration not devastation.”

Mark Lynas, climate author and RePlanet Senior Strategist speaking from COP27 says: “The mainstream environmental movement’s agricultural policies are making things worse not better. Organic and ‘regenerative’ farming methods encourage agricultural sprawl and have become smokescreens for the livestock industry. It’s time for sensible environmentalists to unite behind food production techniques that use less land, not more.”

*For all calculations and a full set of peer-reviewed references for the figures here within please see Reboot Food Full Report here.

lng tanker

lng tanker

Since natural gas imports from Russia are coming to a halt, the world is turning to LNG to still its hunger for gas. But all the panic plans lead to yet another big threat to the climate: overshoot of the remaining carbon budget, thus leading to even higher temperatures, Climate Action Tracker concludes.

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sustainable fashion

sustainable fashion

With 65% of consumers saying that they care about the environment, a mere 15% are actually buying sustainable fashion. The good news is that research finds that will change for the better. At least, again that’s what consumers say.

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mussels remove microplastics from the sea

mussels remove microplastics from the sea

To remove microplastics, the small pieces of plastics that are widely spread all over the world’s oceans and ingested by living creatures is far from easy. Microplastics are found in zooplankton, fish, seabirds, whales, seals, and also humans. Yet, the long-term effects of this plastic pollution threat are still largely unknown. Three scientists, Richard Thompson, Tamara Galloway, and Penelope Lindeque, have conducted ground-breaking research in understanding the impact of microplastics on humans and the environment and are this year’s laureates of the Volvo Environment Prize.

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oil rig

gold hydrogen from old oil rig

A new gold fever may be at hand. Not about the yellow glossy metal, however, but something totally different: gold hydrogen. It comes from microbes that eat oil and produce H2.

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ladybird

natural pest control with ladybird Rhyzobius lophanthae

A story of natural pest control, in which a multinational supplier of fresh vegetables and fruit is embracing entomology for sustainability. In Chile, insects naturally control agricultural pests such as Mealybugs and White scale in a pioneering project.

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bergebulk olympus

bergebulk olympus sail retrofitting

Sails on merchant ships were either from the past or for the future. But sail retrofitting for existing vessels makes it very much today’s topic. A must for the climate and for economic exploitation.

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sustainable car tyres
sustainable car tyres
Michelin is the first manufacturer in the world to unveil sustainable car tires with a high proportion of environmentally sustainable materials that have been approved for use on ordinary road vehicles. These include a tire for buses and a tire for cars, where the car tire contains recovered carbon black from Enviro, among other materials.

The sustainable car tires and bus tires that have now been unveiled by Michelin contain 45 percent and 58 percent environmentally sustainable materials, respectively. The car tire consists of materials such as recovered carbon black that is delivered by Enviro. Both tires unveiled have been approved for use on ordinary road vehicles and have performance levels strictly identical to current tires.

The production of new tires using carbon black recovered with Enviro’s technology reduces carbon dioxide emissions by up to 93 percent compared with the use of virgin carbon black.

Michelin has previously developed a racing tire for electric motorcycles, and one for cars that consist of a high proportion of recovered and sustainable materials, including Enviro’s recovered and ISCC-certified carbon black.

Racing with sustainable car tires

Earlier, the Michelin tire containing 53% sustainable materials, fitted to the H24 GreenGT hydrogen racing car took to the track outside the twenty-four race in La Sarthe, within the framework of a Road To Le Mans (Michelin Le Mans Cup) trial session. Driving on a tire comprising over 50% bio-sourced and recycled materials within the framework of an official competition is a world first. The hydrogen prototype covered several laps on these tires under racing conditions, on the very demanding Le Mans large circuit. Like Team H24 Racing and its driver, Stéphane Richelmi,  we are happy with their performance at the expected level.” Matthieu Bonardel, Director of Michelin Motorsport

A result that demonstrates the Group’s ability to keep to the road map it has laid out for itself in order to achieve 100% sustainable materials on all its tires by 2050, with an aim of 40% sustainable materials at Group level by 2030; and all this while maintaining a very high-performance level, without degrading the environmental impact of tires throughout their life cycles.  Should we believe in this goal?  Florent Menegaux, who attended the 24 Hours of Le Mans, responds to this question unequivocally: “Yes! We are on the way, and I’m struck by the speed at which we are making progress.”

According to Michelin, the sustainable car tires that have now been unveiled pave the way for the future technology that will be used to manufacture Michelin’s standard tires in two to three years’ time. Michelin has set a target of using 100 percent renewable materials in all its tires by 2050.

Scandinavian Enviro Systems contributes to enhanced environmental and economic sustainability using patented technology for the recovery of valuable raw materials from scrapped and end-of-life products, including tires. Since 2020, Michelin has been Enviro’s single largest shareholder.