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May 2021

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Offshore Wind – circular economy

When it comes to circular economy, the renewables sector must surely aim to lead the way – from the decarbonisation of maritime operations to end-of-life recycling of blades. The sector is at an important crossroads: the first generation of turbines are reaching the end of their 25 to 30-year lifespans at sea and something has to be done with this legacy. We estimate that by 2050, the offshore wind industry will need to decommission more than 10,000 turbines globally. In the same way the UK has innovated to reduce costs in wind energy, it is essential to ensure we create innovative solutions to create round trip sustainability for the materials necessary for turbines and bring forward new solutions for thermoset plastics and glass fibre. The next generations need to be circular from the start, designing out waste, developing more sustainable materials and refurbishing old components. A supply chain that can do this will find itself the first choice of turbine manufacturers.

City AM 30th May 2021 read more »

News

Banking giants team up to accelerate net-zero transition for steel industry

Six leading lenders to the steel industry – ING, Citi, Goldman Sachs, Societe Generale, Standard Chartered and UniCredit – have created a new working group focusing on decarbonisation.

Steel manufacturing is accountable for around 7% of global emissions from fuel use

Steel manufacturing is accountable for around 7% of global emissions from fuel use

Called the Steel Climate-Aligned Finance Working Group, the panel will consist of senior representatives from each bank’s metals and mining teams, as well as sustainability and climate professionals. They will work together to develop a financing agreement, to be signed by all member firms and other banks and investors, that is aligned with the Paris Agreement.

In a statement, the Group said that the global steel sector is currently “lacking commercially viable alternatives” to goal. The idea of the financing agreement is to scale up investment in potential alternatives that are not yet commercially mature. Researchers believe that a combination of electrification, energy storage, alternative fuels and circular economy innovations are needed to align the sector with net-zero. 

Additional finance could also support carbon capture and storage (CCS) technologies, that could capture emissions at steel plants using coal.

The Group’s pathway will be aligned with net-zero by 2050 and be globally applicable. Further information on the agreement’s emissions scopes, methodologies and governance structure will be announced at a later date. However, the Group has stated that it will be modelled after the Poseidon Principles, the first sector-specific climate-aligned finance agreement for maritime shipping. The Poseidon Principles have been in operation for almost two years and now cover nearly 40% of senior shipping debt.

Moreover, the Group has confirmed that its work will form part of the Mission Possible Platform’s Net Zero Steel Initiative. The Platform was unveiled in January, uniting 400 heavy emitters in a bid to accelerate the low-carbon transition. Bezos Earth Fund and Breakthrough Energy are supporting financially, while management duties sit with he Energy Transitions Commission, Rocky Mountain Institute, We Mean Business Coalition and World Economic Forum (WEF).

Editor’s note: The Mission Possible Partnership bears no relation to edie’s Mission Possible campaign. That campaign is still ongoing and you can find out more about it, here.

“The challenge for the steel sector to decarbonise is significant, with alternative technology paths unproven and not yet commercialised,” ING’s global head of metals, mining and fertilisers Arnout van Heukelem said.

 “By leading this working group, we signal our commitment to help define what the energy transition means for the sector and our clients. It will also help us to define our expectations for change and define an ambitious yet realistic trajectory to meet those ambitions.”

Late last year, ING published a progress report on its efforts to align its €600bn lending book with the Paris Agreement. The Dutch bank uses a methodology called ‘Terra’ to identify the highest-emitting sectors in its portfolios and to develop specific targets for engagement and divestment.

Since introducing Terra in 2018, the bank has reduced its direct exposure to coal by 22% and pledged to reduce its financing to upstream fossil fuel operations by one-fifth by 2040. It has also increased engagement with the companies it holds in the power generation, shipping, cement, steel, residential real estate, automotive, aviation and commercial real estate sectors.

A global race

The news from the banks comes in the same week that the Energy & Climate Intelligence Unit (ECIU) published an analysis of the steel sector’s low-carbon transition across different European nations.

The paper concludes that the UK is falling behind virtually all other major players in the continent, with the EU hosting 23 hydrogen-based steel production projects and the UK hosting none. EU projects could produce more than 650,000 tonnes of green steel by 2022, the report states.

While praising the UK Government for introducing a Clean Steel Fund, the report outlines how none of the £250m will be allocated until 2023, and how this figure falls short of what is needed to align the sector with net-zero. It flags the Climate Change Committee’s (CCC) recommendation that steel sector emissions are cut by 23% between 2020 and 2030. To meet this recommendation – part of the Sixth Carbon Budget – cuts to emissions must be made now, the ECIU is urging.

“The UK has enviable resources to produce clean hydrogen from renewable energy, using this to underpin a clean steel industry will bring vast economic benefits across the country,” the ECIU’s head of analysis Dr Jonathan Marshall said.

“EU nations are clearly seeing the opportunities presented by decarbonising their steel sectors; the UK needs to recognise that this is a competitive global market, so sticking with the status quo, or worse, arguing that the sector will remain reliant on coking coal, just doesn’t cut  it. “

Dr Marshall here is alluding to support for a proposed deep coal mine in Cumbria, on the grounds that the coal would be used for steel production in the UK, potentially displacing imported coal.

On hydrogen, the UK’s Hydrogen Strategy is due our in the coming weeks after Covid-19-related delays. It will build on the Ten Point Plan commitment to bring 5W of low-carbon hydrogen production capacity online this decade. 

Sarah George

News

Shareholders pass vote for HSBC to phase-out global coal financing by 2040

Shareholders of HSBC have today passed a proposed management resolution that commits the bank to phase-out financing for the coal industry by 2040 worldwide, following successful campaigning from investors.

HSBC must now publish a plan outlining its new phase-out policy

HSBC must now publish a plan outlining its new phase-out policy

HSBC shareholders today met to vote on the climate resolution, which if passed would commit the company to phase out finance for the coal industry by 2030 in the OECD and by 2040 worldwide.

Earlier this year, investors with a combined $2.4trn in assets under management filed a resolution at HSBC, calling on the bank to publish a strategy that outlines efforts to reduce exposure to fossil fuel assets.

The ShareAction coalition has since encouraged HSBC’s board to table a resolution that will phase-out this financing in the European Union and OECD by 2030 and globally by 2040. The resolution required more than 75% of the votes to pass. Preliminary results showed the resolution passing with over 99% of the vote.

ShareAction’s senior campaign manager Jeanne Martin said: “We’re delighted that our campaign has resulted in a binding commitment by HSBC to phase out coal, but the devil is in the detail and the next six months are crucial to ensure that this commitment is translated into robust sector policies.”

Part of HSBC’s resolution commits it to “publish by the end of 2021 a policy that will… provide further detail on the phase out plan, its scope and interim targets” and to “engage with ShareAction, representatives of the group of co-filing institutions and other stakeholders in the development of this policy”.

Net-Zero finance

In October, HSBC committed to reaching net-zero financed emissions by 2050 and outlined plans to finance at least $750bn of low-carbon activities within a decade. However, ShareAction claims that in that HSBC funneled $1.8bn into fossil fuel companies in the build-up to the announcement.

The bank has committed to reaching net-zero across its own operations and supply chains by 2030 and to ensuring that all projects it finances are generating no net emissions by mid-century. It has outlined plans to report in line with the Taskforce on Climate-Related Financial Disclosure’s (TCFD) recommendations and to encourage its business customers to follow suit.

However, HSBC has reportedly provided $87bn in financing to fossil fuel companies since 2015. The bank has also faced criticism from investors for financing coal firms and businesses with known links to deforestation in recent years. HSBC also faced criticism from investors and campaigners for making no commitment to reduce funding for fossil fuels, in particular coal, which has risen each year since 2016. 

Shareholder revolution

The HSBC announcement comes as oil majors are having their decarbonisation plans scrutinised and ruled upon by activists and courts alike.

This week, shareholder motions filed by climate activists have passed at US fossil fuel giants ExxonMobil and Chevron.

At the Exxon AGM, shareholders were given the choice to add up to four independent director candidates from climate action group Engine No. 1 to the board. The energy major reportedly did not want any of these candidates to be voted in but, ultimately, two were appointed.

At Chevron’s AGM, meanwhile, a proposal for new carbon targets from Dutch campaign group Follow This passed with 61% of the vote. The resolution will require Chevron to prove its climate targets are aligned with the Paris Agreement and to cover emissions in absolute terms.

While Chevron has insisted that it is “helping to advance a lower-carbon future” by expanding its forays into sectors like bioenergy, CCS and renewables, it has been repeatedly criticised for overstating its climate ambitions in the past. BlackRock took voting action against Chevron on climate grounds last year as Carbon Tracker analysis claimed the business is not aligned with the Paris Agreement.

The news comes after a groundbreaking ruling from the Hague District Court, in which Royal Dutch Shell has been ordered to raise its commitments to carbon reduction. The ruling is the first of its kind.

Matt Mace

News

Ireland – onshore wind

EDF Renewables Ireland has unveiled plans to develop a 100MW wind farm to the south of Bellacorick in Mayo county in the country. Expected to feature up to 25 turbines, the project will be capable of generating enough electricity to power more than 60,000 homes. The project is expected to be located in a forested area to the northeast of Slieve Carr, nearly 8km southeast of Bangor Erris. EDF Renewables Ireland said that the project team is currently collecting wind data and mapping the environmental constraints on site, which will help in creating a preliminary wind turbine layout.

NS Energy 27th May 2021 read more »

News

Gigafactory

The race to develop the UK’s first ‘gigafactory’ looks set to have a new contender with reports today that Nissan is currently in advanced talks to develop a new facility capable of producing 200,000 electric vehicle batteries a year at its Sunderland manufacturing site. The Japanese carmaker is reportedly in talks with the UK government with a view to having the new facility up and running in 2024, and is expected to make announcement on the outcome of the discussions in the coming months, according to the Financial Times.

Business Green 27th May 2021 read more »

News

Prime Minister Boris Johnson urges UK SMEs to make net-zero commitments

Prime Minister Boris Johnson has issued a rallying call to the UK’s small and medium-sized (SME) businesses to make small steps to reduce emissions and contribute to the UK’s net-zero target for 2050.

Businesses that sign up will receive climate-related support from the likes of NatWest, Google, Scottish Power and BT

Businesses that sign up will receive climate-related support from the likes of NatWest, Google, Scottish Power and BT

The campaign has been set up to encourage SMEs and microbusinesses to commit to cutting their emissions in half by 2030 and to net-zero by 2050 or sooner through the new UK Business Climate Hub.

Prime Minister Boris Johnson said: “Every step that a small business takes on their journey to net-zero adds up – not only in protecting the health of the planet but also in future-proofing their business and encouraging new investment, new customers and new opportunities for growth.

“We are providing the support and advice small businesses need to join us and become leaders in the fight against climate change.”

SMEs have been urged to switch to energy-saving light bulbs and switch to electric vehicles or cycling schemes for works.

Businesses that sign up will receive climate-related support from the likes of NatWest, Google, Scottish Power and BT.

Additionally, those that make a net-zero commitment will be recognised by the UN Race to Zero campaign. Almost one in three FTSE100 companies have signed up to the UN’s Race to Zero campaign, designed to accelerate the adoption of net-zero targets ahead of COP26.

Business & Energy Secretary Kwasi Kwarteng said: “Small businesses are the backbone of our economy and as we transition to a green future, they will also the backbone of the UK tackling climate change. There are huge opportunities for a small business to go green – not only playing their part in saving the planet from climate change but helping grow their business and ensuring it is fit for the future.

“Simple changes could differentiate a business from the competition, attract new customers and investment and save them money on their running costs. That is why I am urging the nation’s small businesses to sign-up to become business climate leaders and lead the charge in protecting the future of our planet.”

There are around six million SMEs in the UK, accounting for 99% of the nation’s enterprises. They also employ 60% of the UK workforce and generate £2.2trn of revenue.

The announcement from Government follows the formation of the Zero Carbon Business Partnership, set up to help SMEs access the education, expertise and opportunities for collaboration needed to meet or better the UK’s 2050 net-zero target.

Members of the new Zero Carbon Business Partnership include the Federation of Small Businesses, British Chambers of Commerce, British Retail Consortium and Make UK. 

A survey of 500 SMEs conducted by Opinium on behalf of think tank the Entrepreneurs Network and the Enterprise Trust found that 61% of British SMEs believe that the move to a greener economy post-Covid-19 presents positive opportunities.

In that survey, respondents cited poor policy support as the biggest barrier to action.

Another piece of research, from the national standards body BSI, found that just one in five UK SMEs have a public and time-bound net-zero target, as opposed to half of large businesses.

Matt Mace

News

Climate activists appointed to ExxonMobil board as Chevron shareholders back stronger emissions goals

Shareholder motions filed by climate activists have passed at US fossil fuel giants ExxonMobil and Chevron, with disgruntled investors clearly keen to see more ambitious emissions reduction targets.

After BP shareholders rejected a climate motion earlier this month, several other major players will now be forced to strengthen targets 

After BP shareholders rejected a climate motion earlier this month, several other major players will now be forced to strengthen targets 

Both firms hosted their 2021 AGMs on Wednesday (26 May).

At the Exxon AGM, shareholders were given the choice to add up to four independent director candidates from climate action group Engine No. 1 to the board. The energy major reportedly did not want any of these candidates to be voted in but, ultimately, two were appointed.

Engine No. 1 said in a statement that the board change is “much-needed” in response to both the energy transition and “significant shareholder pressure”. Blackrock, the world’s biggest investor, is reported to have sided with Engine No 1.

Before January 2021, Exxon was only publishing and setting targets for Scope 1 (direct) and Scope 2 (power-related) emissions in its environmental disclosures. Emissions from these sources have been falling steadily but gradually, with a 3.2% reduction recorded between 2019 and 2020.

But green groups and shareholders then successfully pressed the business into disclosing Scope 3 (indirect) emissions and have continued to request stronger climate targets. Exxon is striving to ensure that every barrel of oil produced in 2025 generates one-fifth fewer emissions over its life cycle than in 2016. Supporting targets to decrease methane intensity by 40-50% and flaring intensity by 35%-45% have been set. Many want targets in absolute terms, plus a long-term commitment to net-zero.

At Chevron’s AGM, meanwhile, a proposal for new carbon targets from Dutch campaign group Follow This passed with 61% of the vote. The resolution will require Chevron to prove its climate targets are aligned with the Paris Agreement and to cover emissions in absolute terms.

While Chevron has insisted that it is “helping to advance a lower-carbon future” by expanding its forays into sectors like bioenergy, CCS and renewables, it has been repeatedly criticised for overstating its climate ambitions in the past. BlackRock took voting action against Chevron on climate grounds last year as Carbon Tracker analysis claimed the business is not aligned with the Paris Agreement.

Follow This has also had motions pass at Phillips 66 and ConocoPhilips this year. The group’s founder Mark van Baal said: “Big Oil can make or break the Paris Accord. Investors in oil companies are saying now: we want you to act by decreasing emissions now, not in the distant future.”

The news comes after a groundbreaking ruling from the Hague District Court, in which Royal Dutch Shell has been ordered to raise its commitments to carbon reduction. The ruling is the first of its kind.

Carbon Tracker update

In related news, Carbon Tracker has published a ranking of the world’s ten biggest oil majors, in terms of the strength of their climate commitments. Chevron and ExxonMobil, along with ConocoPhilips, are at the bottom of the table.

The tracker assesses whether companies have ‘net-zero’ goal; whether they cover indirect emissions from oil and gas use and other key sources; whether targets are measured in terms of absolute emissions and whether investment plans are aligned with climate targets.

Eni was found to be the only firm not excluding any key emissions sources from its net-zero pledge. While BP made the top three, its policy excludes its stake in Rosneft, which accounts for a third of its global production, and downstream product sales.

The US firms making up the bottom three are likely to deliver just a 15-20% cut in operational emissions by 2025 and could see indirect emissions growing in the coming years, under current plans, the report states.

Carbon Tracker has said that the overall picture is worrying and is calling on all investors in the sector to “question the credibility” of energy majors’ plans for achieving their climate targets. Investors should specifically be looking for plans to cut oil and gas production as well as scaling up investments in sectors like renewable generation, hydrogen, electric mobility and carbon capture and storage (CCS), the organisation is urging.

“Net-zero is not enough – it’s the pathway that matters,” report author Mike Coffin said. “To align with the Paris Agreement, companies must commit to absolute reductions in carbon emissions from their oil and gas products, with strong interim targets and a credible implementation plan.”

Sarah George

News

Ireland – Hydrogen

This site’s Daily News content is provided by Edinburgh Energy & Environment Consultancy. EEE are experts in policy and analysis on energy and environment issues, particularly nuclear power.

Services include: supplying tailored news services, writing reports and briefings, drafting consultation responses and developing political campaign strategies.

Clients have included Greenpeace, Nuclear Free Local Authorities, WWF Scotland and the UK Government’s Committee on Radioactive Waste Management.

News

Ireland – EDF

EDF Renewables Ireland is announcing plans to develop a 100MW wind farm to the south of Bellacorick in Mayo. The proposed project, which could consist of up to 25 turbines and power more than 60,000 homes, will be located in a forested area to the northeast of Slieve Carr, approximately 8km southeast of Bangor Erris.

EDF Energy 27th May 2021 read more »

News

Dutch court orders Shell to strengthen carbon reduction targets

A Dutch court has ordered a groundbreaking ruling for Royal Dutch Shell to raise its commitments to carbon reduction, in what could mark the first of many legal cases against energy firms on climate grounds.

Currently, Shell is aiming to reduce the carbon intensity of its products by 20% by 2030

Currently, Shell is aiming to reduce the carbon intensity of its products by 20% by 2030

At the Hague District Court, Judge Larisa Alwin has today (26 May) confirmed a ruling that orders Shell to raise its current decarbonisation commitments. Under the new ruling, Shell has been ordered to reduce emissions by 45% by 2030 compared to 2019 levels.

A lawsuit was filed by activists including Friends of the Earth and Greenpeace in April 2019, on behalf of more than 1,700 Dutch citizens.

Currently, Shell is aiming to reduce the carbon intensity of its products by 20% by 2030, but the court noted that an intensity-based target could enable growth and diminish absolute carbon emission reductions. The court added that Shell’s current climate policy was “full of conditions”.

The court ruling is a landmark moment for citizen activism. It marks the first successful lawsuit against an energy firm on climate grounds and could pave the way for more energy companies to have their emissions targets scrutinised.

Announced back in February, Shell’s strategy is aligned with reaching net-zero by 2050, according to the company.

Shell’s plan targets a 65% reduction in emissions from the end-use of energy products by customers by mid-century, with forest creation and carbon credit purchases offsetting remaining emissions. Reducing oil and gas production forms a key facet of the plan; the firm is aiming to reduce the production of what it calls “traditional fuels” by 55% by 2030 as it scales business operations in renewable electricity, biofuels, electric vehicle charging, hydrogen and carbon capture and storage (CCS).

Earlier this month, Royal Dutch Shell received overwhelming backing for its own energy transition strategy at its AGM but a shareholder resolution that would have forced accelerated climate action did not pass.

Some campaigners and investors in Shell had hoped to pass stronger measures to bolster the long-term climate target. A resolution at the AGM, tabled by campaign group Follow This, would have required shell to prove that absolute emissions reductions over the coming decades are aligned with the Paris Agreement. Shell is still planning to allocate at least 75% of its spending to fossil fuels this decade.

The resolution failed to pass. While its work has been backed by more than 6,000 shareholders across the energy sector, including Shell backers Aegon and RWC Partners, it was supported by just 30.47% of voters at the Shell AGM.

In a statement following the vote, the Church of England Pension Board, which led the investor talks with Shell on its strategy, warned the energy major not to get complacent on climate action in light of the vote.

Matt Mace

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