🌍 The Biggest Loser: decarbonization edition #63CommentShareCommentShare

Happy Monday!

The EU slims down their carbon waistband with the Fit For 55 plan which, if implemented, would make or break new big European winners (and losers) starting next decade. Across longitudes, China teases the world’s largest emissions trading program to cover a whopping 7% of global emissions, and mandates that 25% (!) of territory to ecological conservation.

Meanwhile, Heart Aerospace takes flight with their regional electric planes and Mighty Buildings 3D print homes both with new fundraises. It’s another day, another $4 billion announced climate growth fund. Plus lots of consultants’ charts, and even more uber quality climate jobs. There’s really never been a better time to work on climate!

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🇪🇺 EU gets ‘Fit for 55’ 💪

The EU cuts out carbon as it gets in shape for extreme heat summers (and winters). This past week, the European Union announced an ambitious goal to become the world’s first climate-neutral continent by 2050. Its first major climate milestone will be a 55% reduction of emissions by 2030 from 1990 levels boosting the bloc’s greenhouse emissions-cutting goal to 61% by 2030, up from 43%.

In a wide-ranging proposal, the European Commission, the executive arm of the EU, outlined ambitions for the 27-member bloc:

💨 Expanding the bloc’s Emissions Trading Scheme (ETS), which permits businesses to trade allowances to keep total greenhouse gas emissions below a certain cap. This carbon tax would apply to industries including home heating and transportation fuels and could raise to at least $71/ CO2 ton.

💰 Including carbon border taxes, which is a concept that has been debated for years. If adopted, it would be the first of its kind. These taxes would place a carbon tariff on imports from countries that are not taking similar steps to slash their GHG emissions.

🚗 Banning gasoline and diesel car sales by 2035.

☀️ Using renewable energy to fulfill 40% of energy demand by 2030 – a 25% increase from the current energy mix.

The Fit for 55 package is a holistic workout regime – a trade, transport, nature, infrastructure, and growth policy bundled together for maximum economic and carbon abatement gains. The trade component particularly has international significance, with the potential to tackle the climate “free-rider problem.” Packed with rising carbon prices, growing demand for renewables, and ending fossil fuel vehicles – the policy package is a powerhouse.

Per usual, this proposal is far from a done deal. EU policymakers might stick with their program or undercut the policy when prices start to rise, as they have in the past. Like what is happening in the US with the initially ambitious and now watered-down infrastructure plan, we can expect the package to face intense lobbying and subsequent alterations.

The implications of this new package are clearly positive for climate tech. As an entire continent tightens its emissions belt and gets to work, they will need the support of established players and nimble startups. These climate-oriented organizations also have a leg up to others that need to hike up the climate learning curve.

👀Following the trend: As a quick context setter, China is still by far the world's largest greenhouse gas polluter with fossil fuel emissions ~4x that of the EU’s. However, big things are also happening out East as China is set to launch the world’s largest emissions-trading program. It would account for 7% of all global greenhouse gas emissions – though timeline and details remain to be seen.

Deals of the Week (7/12-7/18)

✈️ Heart Aerospace, a Sweden-based startup working on an electric regional airliner, raised $35m in Series A funding from Bill Gates’s Breakthrough Energy Ventures, Mesa (United’s venture arm), and seed investors EQT Ventures and Lowercarbon Capital.

🌾 Comet Bio, a Canada-based manufacturer of ingredients created from crop leftovers, raised $22m in Series C funding from Open Prairie, Louis Dreyfus Co., BDC Capital, and Sofinnova Partners.

🏠 Mighty Buildings, an Oakland, CA-based startup looking to build sustainable and affordable 3D printed homes, raised $22m in extended Series B funding from ArcTern Ventures, Core Innovation Capital, Decacorn Capital, Gaingels, Khosla Ventures, Klaff Realty, MicroVentures, Modern Venture Partners, Polyvalent Capital, and Vibrato Capital.

🐔 Next Gen Foods, a Singapore-based developer of plant-based chicken alternatives, raised $20m in Seed funding from GGV Capital, Bits x Bites, Yeo Hiap Seng, Chris Yeh, and Dele Alli.

🛴 Veo, a Chicago, IL-based e-scooter sharing startup, raised $16m in Series A funding from Autotech Ventures, UP Partners, FJ Labs, and Interplay Ventures.

🌱 Natural Fiber Welding, a Peorira, IL-based sustainable textiles materials company raised $15m in funding from the Community Development Venture Capital Alliance, BMW i Ventures, Prairie Crest Capital, Ethos, For Good Ventures, and Evolution VC Partners.

🍎 Fazla Gida, a Turkey-based food surplus startup raised $3m in Series A funding from 212, MAP, 500 Istanbul, and Atlantic Food Labs.

💨 Vaayu, a Germany-based carbon tracking platform for retailers, raised $1.6m in Seed funding from CapitalT, Atomico’s Angel Program, Planet Positive LP, Saarbrücker 21, Expedite Ventures, and NP-Hard Ventures.

🌱 Climate X, a UK-based climate analytics startup, raised $1.5m in pre-Seed funding from Pale Blue Dot, Blue Wire Capital, A100x, and Possibilian.

Later-Stage Fundings / New Funds:

General Atlantic announced the formation of BeyondNetZero (“BnZ”), a new venture targeting growth equity investments related to climate change, for which the growth investor is aiming to raise $4b. With a “B.”

SES Holdings, a maker of lithium-metal rechargeable batteries for EVs, agreed to go public via Ivanhoe Capital Acquisition at an implied $3.6b valuation.

Altus Power, a solar power company, agreed to go public via CBRE Acquisition Holdings at an implied $1.58b valuation.

The Ecosystem Integrity Fund, a sustainability-focused early growth stage investment firm, closed its third fund, with $250m.

In the News

Sen. Tina Smith made Energy Twitter all giddy when she spilled the beans that a Clean Electricity Standard (CES) found a home in the $3.5T Congressional reconciliation package. Now all eyes are on Sen. Joe Manchin who might pull his support because he’s “disturbed” by the bill’s portrayal of fossils…

Across hemispheres, scientists have confirmed for the first time that the Amazon has now become a carbon source rather than a carbon sink, emitting a billion tonnes of CO2 annually. While clearing land for farming causes most of these emissions, deforestation itself creates a feedback loop driving a “release of carbon from the remaining forest that reinforces additional warming and more carbon loss.”

The DoE announced a new (literal) Earthshot goal to reduce long duration energy storage tech cost by 90% by the end of the decade. Storing renewable energy across weeks, and even months, is a linchpin to meeting US clean energy goals.

In a rare move to put ecological conservancy before industry, China designatesa whopping 25% of its territory to “ecological conservation” areas, redlining areas prohibiting any human activities and industrial development.

Not to be outdone, the EU announced that it plans to plant 3 billion trees by 2030.

President Biden and Chancellor Merkel launchedthe US-Germany Climate and Energy Partnership to (1) raise global climate ambition, (2) develop and collaborate on energy technologies, and (3) accelerate sustainable energy adoption in emerging economies.

How did Australia end up in last place on the United Nations ranking for climate action? According to the Washington Post, through self-sabotage, climate denialism, and a federal government married to coal. Though down under was hardly alone. “For the first time since the adoption of the SDGs in 2015, the global average index score decreased over the course of the year. This result was driven by the pandemic, which increased poverty rates and unemployment in a “major setback” for sustainable development generally.”

For those who didn’t make it onto his rocket trip, Musk is building an off the grid solar neighborhood in Austin, TX where the houses are all equipped with V3 solar roof tiles, Powerwall battery storage, and charging points for Tesla electric cars.

Pop-up

GHG emissions in the construction ecosystem (Source: McKinsey) — *Construction represents 40% of CO2 emissions from fuel combustion and 25% of GHG emissions overall (Source: McKinsey)*

McKinsey released a report on decarbonization opportunities in the construction industry, complete with a classic marginal abatement cost curve.

In an op-ed, BCG suggests that 40% of emissions can be eliminated through measures that cost <10€/ ton CO2e, and that control for major decarbonization rests within supply chains.

A searing profile in the NYT of the bankers and visionaries behind the Lordstown Motors SPAC and ensuing implosion. “Good technology isn’t enough… not checking out the jockey of the horse is an astonishing due-diligence failure.”

Download and save to Desktop: updated criteria for high quality CO2 removal, from Microsoft and Carbon Direct.

2020 was the year of our favorite underappreciated climate tech. Electric heat pump (3.5m units) sales eclipsed gas furnaces in 2020 for the first time.

In the booming world of sustainability, how greenwishing and “ESGlalaland” might be more wishful thinking than real progress.

NYTimes released an interactive map of live wildfire coverage.

Flying fish! Must watch video of a plane airdropping thousands of fish to restock Utah lakes.

Your next pair of Lululemon leggings might be made from waste gas - though not sure that phrasing quite nails the branding…

One man’s waste, another bacteria’s treasure. Bioleaching, where microbes oxidize metal as part of their metabolism, may be the key to battery metal recovery.

Profile on the state of anaerobic digesters for waste-to-value that reads like an MMA sportscaster - “the strongest have survived.”

Listen in to a new podcast series with PhD psychologists on applying theories of influence to hack sustainable consumer behavior.

Opportunities & Events

🗓️ Clean Energy Trust: Join Clean Energy Trust on July 29th for a webinar with Maersk, BNSF Railway, and Boeing on how to decarbonize heavy duty transportation.

💡 Third Derivative: Seeking climate tech startups addressing hard science, hardware, software, and business model innovation, applications for Third Derivative are open on a rolling basis.