David Fuller and Eoin Treacy's Comment of the Day
Category - Energy

    Scientists Reach 'Unequivocal' Consensus on Human-Caused Warming

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    Humanity will have about a 50% chance of staying below the 1.5°C threshold called for by the Paris Agreement if CO₂ emissions from 2020 onwards remain below 500 billion tons. At the current rate of emissions, that carbon budget would be used up in about 13 years. If the rate doesn’t come down, the planet will warm more than 1.5°C.

    “Our opportunity to avoid even more catastrophic impacts has an expiration date,” said Helen Mountford, vice president of climate and economics at the World Resources Institute. “The report implies that this decade is truly our last chance to take the actions necessary to limit temperature rise to 1.5°C. If we collectively fail to rapidly curb greenhouse gas emissions in the 2020s, that goal will slip out of reach.”

    The new publication lands in the middle of the ramp-up to COP26, to be held in Glasgow in November. A global deal to pursue faster emission cuts would depend on poor countries securing $100 billion a year in climate finance from rich countries, something envisioned in previous climate agreements
    but not yet achieved. National governments would also need to agree to rules governing the trading of emissions permits, to ensure those moving faster towards cuts are rewarded for doing
    so.

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    Trend Compendium 2050: Six MegaTrends that will shape the world

    Thanks to a subscriber for this report from Roland Berger which may be of interest. Here is a section:

    Manmade global temperature increases can only be limited to 2°C if significant additional efforts are undertaken to become carbon-free in 2100

    Is the limit of 2°C enough? To keep the global warming below 2°C had long been regarded as the right target measure to limit the most dangerous risks. More recently, 1.5°C has been considered safer, which requires rapid, far-reaching, and unprecedented changes across all aspects of society.

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    Variants and Volatility but Fundamentals Intact

    Thanks to a subscriber for this report from Morgan Stanley which may be of interest. Here is a section:

    Enel installs 6.1 MWh vanadium redox flow battery in Spain

    This article from PV Magazine may be of interest to subscribers. Here is a section:

    Canada-based vanadium mining company Largo Resources has announced that its U.S.-based unit Largo Clean Energy has signed its first supply agreement for its VCHARGE ± vanadium redox flow battery system, with Enel Green Power Spain, a unit of Italian renewable energy company Enel Green Power, which is itself part of the Enel group. Under the terms of the deal, Largo Clean Energy will provide a five-hour, 6.1 MWh system for a project in Spain whose start-up is scheduled for the third quarter of 2022.

    The company's VPURE and VPURE + vanadium products come from one of the three largest vanadium mines in the world, the company's Maracás Menchen mine, located in Brazil. These compounds are used to develop's Largo's  VCHARGE ± vanadium redox flow battery technology.

    Largo Clean Energy began, last year, the development of its vanadium redox flow battery (VRFB) technology based on 12 patent families previously owned by U.S. storage specialist VionX Energy, whose assets it acquired for $3.8 million.

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    How China's New Carbon Market Will Work

    This article from Caixin may be of interest to subscribers. Here is a section:

    Before the launch of the national ETS, China had already established regional ETSs in eight provinces and cities, including Beijing, Shanghai and Shenzhen. Seven of the regional ETSs started trading in 2013, while the one in the eastern province of Fujian kicked off three years later. These regions allow companies to buy carbon credits equivalent to as much as 5% to 10% of their original quotas or actual emissions. The average price of carbon credits traded on the regional ETSs stands at 50 yuan ($7.73) per ton, analysts at Guotai Junan Securities Co. Ltd. estimate, far lower than the 250 yuan equivalent per ton in the EU ETS in 2020.

    And

    Initially, China’s national ETS will only cover the electricity generation sector. A batch of 2,225 electricity companies (link in Chinese) will participate in the trading.

    In addition to electricity, the trading system will eventually cover seven other industries (link in Chinese), including petrochemical, chemical, construction materials, steel, nonferrous metal, papermaking and aviation. Companies that emit greenhouse gases equivalent to more than 26,000 tons of carbon dioxide a year will be included in the system.

    It is expected that financial institutions will indirectly engage in the carbon market, as central bank Governor Yi Gang in April said that “the carbon market should be a financial market in nature and allow carbon financial derivatives trading.”

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    Email of the day on Seadrill

    Thanks for bringing Seadrill to our attention back in April. Given the recent price performance what are your thoughts from a chart and fundamentals perspective? Many thanks and best wishes, Nav

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    Orocobre June Quarter Output 3,300 Tonnes of Lithium Carbonate

    This note covering Orocobre’s production results today may be of interest.  

    About 66% of production was battery grade lithium carbonate vs 21% a year earlier.

    Sales of Olaroz lithium carbonate were 2,549t at $8,476/t FOB, with pricing up 45% on the March quarter

    Inventory has increased due to Covid-19 related transport delays and the requirement to hold additional safety stock in Japan to guarantee delivery into the Prime Planet Energy and Solutions contract

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    U.S. Service Industries Expand at Slower Pace Than Expected

    This article from Bloomberg may be of interest to subscribers. Here is a section:

    The services index of inventories also shrank, indicating that supply chain constraints continue to hold back economic activity. Supplier delivery times remain elevated due to truck availability, slower rail services, port congestion and container shortages, Nieves said on a call with reporters.

    A separate gauge of inventory sentiment dropped to a record low, showing more service providers see their stockpiles as too lean. The index of prices paid for materials fell slightly, suggesting that while still elevated, the acceleration in cost pressures may be starting to cool.

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