SBTi backpedals

PLUS: Japan's large bets on nat gas in India and renewables globally, new Sunya Stories pod, ENGIE's biogas buy, SOSV's $306mm raise, EQT and Equinor's asset swap, Solugen breaks ground

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:

  • A recent controversy has divided the carbon offsets market, involving the Science Based Targets initiative (SBTi), a key player in emissions accountability and climate targets verification.

  • The controversy arose during a gathering in London, where discussions veered towards the role of SBTi in limiting the use of carbon offsets for achieving green targets, sparking debate among climate experts.

  • The Bezos Earth Fund and the Children’s Investment Fund Foundation, major funders of SBTi, hosted the meeting.

  • The meeting involved implicit and direct requests to SBTi representatives to relax their position on carbon offsets from senior leaders of prominent carbon market standards and lobbying groups.

  • Subsequently, SBTi announced an adjustment in its rules for carbon credits, leading to criticism from staff members who called for the resignation of the CEO and board members.

  • SBTi reversed its decision on the Friday following the staff revolt.

  • The controversy reflects the challenges in addressing Scope 3 emissions and the debate over the efficacy and impact of using carbon offsets.

  • ENGIE has acquired two biomethane production units in the Netherlands, marking its entry into the Dutch biomethane market.

  • The facilities in Hardenberg and Alkmaar have annual biomethane production capacities of 90 GWh and 47 GWh respectively, with the potential for expansion to 150 GWh and 94 GWh respectively.

  • These acquisitions increase ENGIE's biomethane production capacity in Europe to 1.1 TWh, including its existing capacity in France and previous acquisitions in the UK.

  • ENGIE aims to reach 10 TWh of biomethane production annually in Europe by 2030, aligning with its commitment to renewable energy and the decarbonization of the European economy.

  • Japanese investors are partnering with I Squared Capital in a US$370 million strategic investment in natural gas infrastructure in India.

  • The investors will take a minority stake in a Singapore-based holding company with investments in Indian city gas distribution networks.

  • The transaction aims to provide fresh equity to support new infrastructure investments and promote the adoption of global best practices in line with India's energy targets.

  • The investment will facilitate the long-term adoption of biogas and emerging green hydrogen technologies for clean energy goals in India.

  • The Japanese consortium includes Osaka Gas, Sumitomo Corporation, and the Japan Overseas Infrastructure Investment Corporation (JOIN).

  • The Platform has active investments in last-mile city gas distribution businesses and aims to serve millions of vehicles and commercial users by 2030.

  • EQT Corporation announced an agreement with Equinor USA Onshore Properties Inc. to sell a 40% interest in its non-operated natural gas assets in Northeast Pennsylvania, with approximately 225 MMcf/d of forecasted 2025 net production.

  • The transaction includes $500 million in cash and upstream and midstream assets, with EQT forecasting approximately $75 million in 2025 free cash flow based on recent strip pricing.

  • EQT will receive assets such as 26,000 net acres in Monroe County, Ohio, with 2025E net production of about 135 MMcfe/d, 10,000 net acres in Lycoming County, Pennsylvania, with 2025E net production of around 15 MMcfe/d, and a remaining 16.25% ownership in EQT-operated gathering systems in Lycoming County.

  • Equinor will also purchase gas from EQT at a premium to in-basin pricing through the first quarter of 2028 under a gas buy-back agreement.

  • JERA, Japan's largest power company, has launched JERA Nex Limited (JERA Nex), a new global renewable energy business based in London.

  • JERA Nex aims to develop, invest in, own, and operate various renewable energy assets, including offshore and onshore wind, solar, and battery storage.

  • JERA's "JERA Zero CO2 Emissions 2050" initiative, started in 2020, has led to active investments in renewables. This includes acquiring Parkwind, Belgium's largest offshore wind platform, in July 2023, boosting JERA's renewable installed capacity to 3GW.

  • The majority of JERA's operational assets and its development pipeline of 10GW will be transferred to JERA Nex to create a center of excellence in renewables.

  • JERA Nex's goal is to develop 20GW of renewable capacity by 2035, considering acquisitions and partnerships to build a strong pipeline.

  • The UK, a key offshore wind market, will host JERA Nex's global headquarters. The company plans to leverage the UK's expertise in financing and developing renewables projects.

  • SOSV announced the closure of its $306 million SOSV V fund on April 16, 2024, focusing on deep tech startups for decarbonization and human and planetary health.

  • The fund emphasizes the importance of decarbonization and re-industrialization to reinvent production methods.

  • SOSV's investment strategy ranges from pre-seed to later stages, with about 200 investments annually and startup program facilities in New York City, Newark, and San Francisco.

  • The fund tracks top startups in its Climate Tech 100 and Human Health 100 lists, featuring companies like NotCo, Prolific Machines, Unspun, Neptune Robotics, Ten63, Prellis, and Flow Neuroscience.

  • Limited partners include corporates, sovereign wealth funds, institutional investors, and private family offices globally.

  • Solugen has started the construction of Bioforge™ Marshall, a 500,000-square-foot facility adjacent to ADM’s corn processing complex, focusing on low-carbon organic acids for various applications.

  • The facility will have three modular trains with a total production capacity of up to 120 kilotonnes per annum (KTA) and is expected to create over 50 high-skill manufacturing jobs.

  • The Bioforge™ Marshall facility's innovative process is estimated to avoid emissions of up to 18 million kilograms of CO2 annually compared to traditional methods.

  • Dextrose from ADM will be the primary feedstock, with pipelines connecting directly to boost production efficiency and reduce transport emissions.

  • The facility is set to come online in the fall of 2025, contributing to Marshall's economic growth and demonstrating Solugen's commitment to domestic manufacturing and sustainable development.

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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.

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