Good News Monday! – Ancient Scottish forests, $2.6B carbon capture, bp/India green tech
Updated: Jul 16, 2020
It's Good News Monday!
This Monday, we talk about:
Preserving and expanding an ancient forest in Scotland
Norway’s huge $2.6 billion carbon capture project
bp’s three low carbon investments this week, including a $70 million investment in green tech in India
Image Credit: Shell
The Romans described Scottish forest as the Great Wood of Caledon. Although Scotland used to be covered with trees, about 5% of it is now forested due to grazing and timber demands. Glengarry forest is one of the largest areas of native Caledonian pine that remains. A plan is in place to save these trees, hundreds of years old, as well as expand the forest.
Shell UK and Forestry and Land Scotland are working together to not just preserve, but expand the woodland. The 5 year plan includes planting 200,000 new trees in just the first two years. Glengarry foresters collect seeds from Coledonian pine trees and replant them. They check the saplings on a regular basis, watching for disease and hungry deer. Since these forests absorb CO2, Shell can generate verified carbon credits to then sell to its customers with fuel purchases in the Netherlands and UK.
Image Credit: Shell
“Regenerating Glengarry secures the future of the forest, offering a lifeline to wildlife such as pine martens, ospreys, black grouse and red squirrel.” Highland cows also eat around the new trees, allowing them more light to grow. Plenty of rain helps, but that’s usually in abundant supply.
Image Credit: gCaptain
Norway discovered oil in the 1960s, and their sovereign wealth fund is now the world’s largest. They are now looking at ways to use their fund to go after climate change. Lawmakers will consider a $2.6 billion project that cuts emissions from a waste-to-energy power plant and a cement factory. Using carbon capture, they would contain the carbon emissions and take them to the coast, where they would be buried under the seabed.
The project is slated for the next 25 years and will be more expensive than originally thought. 80% of the cost is to be funded by the government with 20% from oil companies Equinor ASA, Total SA, and Royal Dutch Shell Plc, who have lots of experience with undersea drilling. Equinor has built some of the largest carbon capture plants in the world that bury CO2 underground. In this instance, carbon capture is the only way to reduce emissions from the plants mentioned above.
“Olav Øye of Bellona Foundation, an environmental think tank, says the cost of the carbon dioxide captured by the project would be approximately $140 per metric ton. That’s about five times the current price of the EU permits for carbon emissions. That certainly makes it seem expensive, but it’s the wrong way to think about it, says Øye.”
It is estimated electric vehicles in Norway are subsidized by the government at $1,350 per ton of CO2 avoided. This is a much cheaper alternative since Norway plans to become carbon neutral by 2030. Currently, 75% of cars sold are electric plug-in vehicles. CCS projects like this could also open up new business opportunities as other countries look at the technology.
Image Credit: bp
By the end of 2020, bp will invest $70 million in the Green Growth Equity Fund (GGEF) in India, becoming a limited partner with co-investment rights on GGEF projects. The fund expects a total of around $700 million, already with investments from “the Government of India, through the National Investment and Infrastructure Fund (NIIF), and the UK Government, through the Department for International Development (DfID).” Levered capital options will provide further growth.
Earlier this year, bp announced it would become carbon neutral by 2050 or sooner. In getting itself to zero and helping the world, this is one of the investments to expand its portfolio across non oil and gas businesses. BP is looking for opportunities to scale up low carbon solutions quickly to meet its goals, and GGEF will provide those solar, sustainability, and other avenues.
“The GGEF is managed by EverSource Capital, a joint venture between Lightsource bp and Everstone Capital, and has invested in businesses like Ayana Renewable Power, Radiance Renewables, GreenCell Mobility and EverEnviro.”
Some of GGEF’s previous investments are:
Ayana Renewable Power
The investment in GGEF is one of three low carbon energy investments this week from bp. They signed an MOU with JinkoPower in China, a large private solar project developer. Finally, bp signed a gas supply agreement with Chinese energy company ENN for re-gasified liquefied natural gas (LNG), supporting the transition from coal to gas.