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ESG & Climate Services

 

This weekly report covers all aspects of the major changes facing industry, from climate change initiatives through ESG investing, and includes regular work on recycling, renewables, energy transition and hydrogen, and carbon capture and use.  It is included as part of our comprehensive research/consulting subscription, but can also be purchased separately.

 

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Oil and Gas Necessary Long-Term – The Sector Needs Friends

We continue to argue that decarbonized fossil fuels will play a critical role in the energy transition – credible recent analysis on climate change aligns with our view.
Even as global warming narratives become bleaker, energy security and affordability have now taken a front seat, and no government can ignore inflation.
But oil and gas companies face some single-minded shareholders, including some premature break-up activists, and are now suggesting policy vs. waiting.
We look at plastic waste and the scale of the challenge/opportunity in the US, but for more than just recycling – packagers still need to make changes.
We flag rising carbon capture activity despite no improvement in incentives (in the US), discuss hydrogen and renewable fuels, and map other ESG findings.

ESG Pledges Mount in Earnings and Sustainability Reports; Unclear How Many Are Viable & Supported By Real Action Plans

Corporate quarterly and sustainability reports are full of good intentions and targets, but most remain theoretical – we question the viability of many plans.
While 2030 targets provide plenty of timing flexibility, a late-decade rush could make logistic bottlenecks worse than those seen today – a plus for cost inflation.
First-mover advantages today are likely limited unless customers will pay for greener products, but benefits may arise for those beating the investment peak.
There is a little more action in the US, with a Republican Caucus on climate change and energy transition forming post the API carbon tax proposal.
Otherwise, we look at alternative polymers, significantly more studies around US CCS, more wind problems, and renewable power price inflation in Europe.

Optimism Has Created Plenty Of Wind Problems – It Could Spread

The wind power industry is in significant trouble and the last couple of years have been plagued with negative revisions, despite a strong demand outlook.
The issues have been much worse at Siemens Gamesa than others as the company has also mismanaged a new generation of product roll-out.
In 2021 and 2022, material shortages, supply chain disruptions, and increasingly higher input costs have also hurt, but overconfidence has played a major part.
Separately, we look at the API carbon tax plan – a major shirt for the API, but still not a proposal, in our view, that will help reduce emissions – just raise prices.
Otherwise, we look at the cost issues with chemical recycling, how emissions are leading corporate concerns, the unending need for renewable power, and Tesla.

SAF

The Need to Count Carbon – All Things Renewable Are Not Good

The route to renewable fuels and materials is not as simple as using a plant-based input, and carbon sources and sinks matter. The need for audits will rise.
Global accounting firms are staffing up – some dramatically – because they see a need to verify ESG claims, and we think carbon intensity will be top of the list.
Our research and analysis suggest that aviation fuel will be the most significant renewable need from a volume perspective, and demand should exceed supply.
We discuss the Shell energy transition report published today, concluding that it is a good report of progress and intent but will unlikely be enough to calm activists.
Otherwise, we discuss possible shortfalls in the supply of recyclable material, blue versus green (CCS will be critical), renewable power (again), and geology.

GHG

IPCC Identified the Problem; Proposed Solutions Are Flawed

The IPCC’s most recent report properly articulated the scale of climate change and the risks without more action – we view its proposed solutions as flawed.
We observe too much faith in a strained renewable power solution and a reluctance to embrace a realistic transition strategy – involving hydrocarbons.
High energy prices may spur more interest in alternatives, but a lack of materials for proposed solutions remains a significant concern. Alternatives are needed.
We also look at the trade and globalization implications of uneven carbon-based regulation worldwide, likely to change relative costs and drive tariffs.
Otherwise, we look at plastic taxes, more on energy, the increasing flow of ESG-related corporate updates, and increasing concerns about water quality and costs.

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