BlackRock's latest climate fund

PLUS: Aramco's initiatives, SK Capital buys Milestone, Brookfield's $1bn renewable acquisition, LyondellBasell and bp solar, Mirova's infra fund, Targa's sustainability report

Good Morning. This is the Sunya Scoop. The newsletter that takes energy transition news and turns it into an easy-to-read email for you.

Here’s what we have for you today:

  • Aramco is actively developing emissions reduction solutions, including lower-carbon hydrogen, Direct Air Capture (DAC) of carbon dioxide, novel CO2 sequestration, and geothermal energy.

  • These projects align with Aramco's goal to a

    chieve net-zero Scope 1 and Scope 2 greenhouse gas emissions across its wholly-owned and operated assets by 2050, in line with Saudi Arabia's 2060 net-zero ambition.

  • The projects were announced during MENA Climate Week 2023.

  • Aramco is finalizing an engineering agreement with Topsoe to construct a lower-carbon hydrogen demonstration plant in Saudi Arabia, expected to produce six tons of hydrogen per day using renewable electricity and steam reforming of hydrocarbons.

  • Collaboration with Siemens Energy aims to develop a DAC test unit in Dhahran, Saudi Arabia, capable of capturing up to 12 tons of CO2 per year, with plans for a larger pilot plant capturing 1,250 tons per year.

  • Successful pilot of novel CO2 sequestration through in situ mineralization in Jazan, Saudi Arabia, permanently converting CO2 into carbonate rocks.

  • Exploration of geothermal energy involves identifying potential sites on the west coast of Saudi Arabia, assessing geothermal resources using subsurface technologies.

  • SK Capital Partners acquires Milestone Environmental Services from Amberjack Capital Partners.

  • Gabriel Rio, CEO of Milestone, remains in his role and retains significant ownership.

  • Milestone is a leading environmental services and carbon management company headquartered in Houston, Texas.

  • Milestone operates an integrated waste management network focused on carbon sequestration and has sequestered over 2 million tons of CO2e since 2014.

  • The company is expanding its presence in the Carbon Capture and Sequestration (CCS) market.

  • Milestone's CCS subsidiary, Milestone Carbon, is developing and operating injection sites for industrial CO2 emitters to achieve decarbonization goals.

  • SK Capital aims to support Milestone's growth and sustainability initiatives in response to tightening environmental regulations.

  • LyondellBasell signed a 10-year Power Purchase Agreement (PPA) with Lightsource bp for 149 MW of renewable electricity from a solar project in Spain.

  • Lightsource bp will provide approximately 284,000 MWh of solar power annually to LyondellBasell, equivalent to the electricity needs of about 78,000 European homes, starting in 2026.

  • This PPA will help LyondellBasell achieve 78% of its total renewable electricity goal and reduce greenhouse gas emissions.

  • LyondellBasell aims to source at least 50% of its electricity from renewables by 2030, based on 2020 levels.

  • Lightsource bp's solar project in Spain prioritizes environmental care and biodiversity through ecosystem integration and protection measures.

  • The agreement marks Lightsource bp's first cross-border corporate PPA in Spain, with plans to develop over 1 GW of solar projects.

  • Lightsource bp is progressing more than 10 GW of utility-scale solar projects in Europe, offering emissions reduction opportunities for corporations and utilities.

  • Canadian firm Brookfield is acquiring the renewable energy division of UK-based Banks Group.

  • The deal is reportedly valued at approximately $1 billion.

  • Banks Renewables, the unit being acquired, currently operates 11 onshore wind farms in Scotland and northern England, with additional solar and wind projects in development.

  • The UK and European wind industry has faced challenges such as supply chain disruptions, rising project costs, and inflation.

  • In 2015, a ban on new onshore wind farms in Britain restricted planning permissions, but recent government measures aim to streamline planning rules.

  • In September, Brookfield and French lender Societe Generale announced a private debt fund with an initial seed funding of 2.5 billion euros for various sectors, including power and transportation.

  • BlackRock is launching a Climate Transition-Oriented Private Debt Fund, tapping into the fast-growing ESG investment strategy in the US.

  • The fund will be part of BlackRock's investment platform valued at over $100 billion and managed by a team of private debt investors and sustainability experts.

  • It focuses on the transition to a low-carbon economy, aligning with the growing interest in climate transition ESG strategies.

  • Climate transition ESG funds in the US have risen by 304% in the 18 months through June, according to Morningstar.

  • Despite political challenges, more ESG funds are being launched than closed, with a global trend of 253 new ESG funds compared to 90 closures.

  • BlackRock CEO Larry Fink has advocated for incorporating private markets into the climate discussion.

  • The new fund responds to client demand for transition-oriented solutions and will invest in mid-sized firms with carbon reduction goals or climate solutions.

  • It uses BlackRock's proprietary Climate Transition Rating Framework to select companies at various stages of transitioning to net-zero emissions.

  • Europe leads in climate funds with an 84% market share, followed by China at 8% and the US at 6%, according to Morningstar data.

  • Mirova, a sustainable finance affiliate of Natixis Investment Managers, launches its sixth energy transition infrastructure strategy.

  • The strategy aims to raise up to €2 billion and focuses on decarbonization efforts, primarily in Europe.

  • It supports resilient infrastructure financing essential for decarbonizing energy production and consumption.

  • The strategy builds on Mirova's previous successful energy transition strategies and offers flexible investment approaches, including majority or minority stakes, equity financing, or subordinated debt.

  • It will finance proven technologies like wind power, photovoltaics, hydropower, storage, and energy efficiency, as well as low-carbon electric mobility and hydrogen development.

  • The investment team will identify project promoters and provide financial resources throughout project lifecycles.

  • While Europe remains the core deployment target, investments may extend to other OECD member countries, particularly in Asia.

  • Mirova's Energy Transition Infrastructure team has grown to 29 members and has substantial experience in renewable energy investments.

  • Mirova aims to contribute to the fight against global warming and meet the Paris Agreement's emission reduction targets.

  • Mirova is committed to financing a more sustainable economy and strengthening its position as a market leader in energy transition investments.

Source: WSJ

  • The global cruise industry is taking steps to adopt greener technologies in preparation for upcoming climate regulations.

  • Cruise operators are investing in alternative fuels, efficient hull designs, and shore power connections to reduce emissions.

  • Carnival has equipped over half of its fleet to plug into local power grids when docked.

  • Royal Caribbean and Norwegian Cruise Line Holdings are ordering ships capable of running on methanol.

  • MSC Cruises uses a digital platform to optimize ship efficiency.

  • The industry faces challenges due to the high costs of eco-friendly ships and limited availability of renewable fuels.

  • Despite these challenges, the number of cruise passengers is expected to increase significantly.

  • Environmentalists are pushing for quicker action from the industry due to its contribution to greenhouse gas emissions.

  • New environmental rules will require shipping companies to pay for emissions, increase the use of lower-emission fuels, and provide onshore electricity connections at ports.

  • Cruise companies are making green investments despite pandemic-related debt.

  • LNG and green methanol are among the alternative fuels being considered, but concerns about methane emissions exist.

  • Viking Cruise Line is exploring the use of renewable hydrogen as a future fuel source.

  • Targa Resources Corp. has released its Sustainability Report for 2022.

  • Highlights from the report include a 42% reduction in absolute methane emissions, a 21% reduction in flaring intensity in the Permian Basin, and decreased Scope 1 and Scope 2 Greenhouse Gas (GHG) emissions intensity.

  • Targa exported approximately 4.8 billion gallons of liquefied petroleum gas (LPG) globally to displace higher GHG-emitting fuels.

  • Safety improvements were demonstrated with a 26% decrease in Total Recordable Incident Rate and a 30% decrease in Preventable Motor Vehicle Accident Rate.

  • Targa received recognition from GPA Midstream for exceptional safety records at five of its sites.

  • Future efforts for 2023 include increased methane aerial surveys, particularly in the Permian basin, and more frequent camera monitoring at compressor stations and gas plants.

  • The report follows Global Reporting Initiative (GRI) Standards, Sustainability Accounting Standards Board (SASB) Oil & Gas - Midstream Standard, and TCFD guidelines.

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DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.