This week, we're exploring Europe's continued embrace of clean energy, Indonesia's opening of its carbon markets, and the initial impact of the Trump Administration's rollback of climate commitments and investments.

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Nearly half of EU power comes from clean energy: A report by the climate energy think tank Ember found a record 47% of the European Union's electricity comes from solar and other renewable energy sources. With an additional 24% coming from nuclear power, nearly three-quarters of the EU's electricity is emissions-free. Additionally, the EU's solar farms produced more power than coal plants for the first time in 2024, marking a significant milestone in the bloc's shift away from coal. According to Ember’s report, solar generation in the EU jumped by 22% to around 304 terawatt hours in 2024, while coal power fell by nearly 16% to just over 269 terawatt hours. The success of solar power in the EU is attributed to a surge in output, but wind power saw a relatively modest increase of 1.5% in 2024 compared to the previous year. The decline of coal in the EU is a positive sign, but global coal demand, driven by China, is expected to continue to break records in the coming years.

“Europe will stay the course and keep working with all nations that want to protect nature and stop global warming. The Paris Agreement continues to be the best hope for all humanity.” - Ursula von der Leyen, President of the European Commission, at the World Economic Forum

Australia seeks to spur green investment: The Australian government is investing A$2 billion into the Clean Energy Finance Corp. (CEFC) to stimulate investment in the country's energy transition. The injection of funds is expected to unlock an additional A$6 billion in private capital from investors for domestic projects, accelerating the shift towards renewable power and batteries and ultimately lowering prices for consumers. The CEFC was established in 2012 with initial funding of A$10 billion to finance green projects and startups, as large-scale investment in sectors like wind and solar was considered too risky for most private banks at the time. A report from BloombergNEF states that Australia's energy transition investment needs to rapidly increase to stay on a net zero pathway, requiring spending to more than triple from $18 billion in 2023 to $55 billion per year from 2024 to 2030.

Indonesia opens domestic carbon market: Indonesia has opened its domestic carbon market to global investors, allowing foreign participants to trade on the IDXCarbon exchange, operated by the Indonesian stock exchange, to restore its position as a major hub for offsets and attract more investment for local climate action. The IDXCarbon exchange began offering domestic credits from five energy generation projects with nine overseas buyers participating in transactions on the first day and plans to add forestry and land use-based carbon credits as soon as March. Environment Minister Hanif Faisol Nurofiq expects the forestry and land use-based carbon credits, generated from projects like peatland conservation and reforestation, to trade at a higher price than existing products due to benefits like oxygen production, water conservation, and biodiversity protection. President Prabowo Subianto aims to accelerate Indonesia's current target to hit net zero by 2060 by a decade, which would require investment of as much as $3.8 trillion in renewable energy, power grid capacity, and electric vehicles, according to BloombergNEF. Indonesia was previously among Asia's largest suppliers of voluntary carbon credits before exports were restricted in 2022. The country also aims to limit its emissions growth to 23% by 2035 from 2019 levels, primarily through conserving forests and peatlands to mitigate pollution.

Bazil appoints diplomat to lead COP30: Brazil appointed André Corrêa do Lago, a veteran diplomat and former ambassador to Japan and India, as the president-designate of the UN COP30 climate summit to be held in November in Belém, Brazil. The appointment comes as the US, under President Trump, has announced its withdrawal from the Paris climate agreement, making it the only country to leave the accord. Corrêa do Lago, 65, will face the challenge of driving progress on the Paris Agreement without the support of the world's largest historical emitter, the US.

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Microsoft backs Amazon restoration project: Microsoft has partnered with re.green to expand their forest restoration efforts in the Amazon and Atlantic Forests, aiming to remove 3.5 million metric tonnes of CO2 by restoring 33,000 hectares of degraded land. The project will focus on three key regions: the Eastern Amazon, Southern Bahia, and Vale do Paraíba, which are biodiversity hotspots and crucial areas for climate change mitigation. The restoration efforts will contribute to significant carbon sequestration and promote biodiversity conservation by re-establishing diverse and functional ecosystems and enhancing habitats for various species.

LA wildfires show the critical need for adaptation and resilience tech: Venture capitalist Bill Clerico, founder and managing partner of Convective Capital, believes the Los Angeles wildfires serve as a signal for investors to support startups focused on mitigating and preventing similar disasters in the future. Convective Capital is raising a new $75 million fund to double down on its wildfire tech investment, which includes companies like Pano AI and BurnBot that develop smart cameras and controlled burn robots to combat wildfires. Other venture capital firms, such as Lightsmith Group and Breakthrough Energy Ventures, have also launched funds focused on climate adaptation solutions. Still, the current financing for adaptation-focused startups is not enough to meet the global demand.

Mike Bloomberg commits to close financing gap following US withdrawal from Paris Agreement: Bloomberg Philanthropies announced that it will provide funding to cover the US contribution to the UNFCCC, following President Donald Trump's decision to withdraw the US from the Paris Agreement and end international climate funding. The US is responsible for funding around 21% of the UNFCCC's core budget, and last year paid a $7.4 million required contribution for 2024. Bloomberg Philanthropies did not disclose the exact amount of funding it will provide but stated that it will work with other US climate funders to ensure the US meets its global climate obligations. Michael Bloomberg, who serves as a UN special envoy on climate change, also pledged to work with states, cities, and companies to ensure the US stays on track with its global climate obligations despite the federal government's withdrawal from the Paris Agreement. During the first Trump Administration, Bloomberg launched America Is All In to engage cross-sector leaders in maintaining their climate commitments.

 

Wind industry faces major blow from Trump Administration: President Trump signed a sweeping executive order that halts federal approvals for new wind farms in the United States, affecting projects on land and in the ocean. The order directs federal agencies to stop issuing permits for all wind farms across the country, which could disrupt private land projects requiring federal wildlife or environmental permits. The order does not freeze wind projects already under construction, but it does direct the U.S. Attorney General and Secretary of the Interior to explore the possibility of "terminating or amending" existing leases, potentially creating new hurdles for approved projects. The US wind industry, which provides 10% of the nation's electricity, could face significant challenges due to the order, with nearly 40 gigawatts worth of projects under development in the Atlantic Ocean and several states.

Trump halts $300B in green investment: Donald Trump's return to the White House has put more than $300 billion of potential federal infrastructure funding at risk, as he signed executive orders rescinding Joe Biden's climate policies within hours of his inauguration. The affected funds were provided under the Inflation Reduction Act and the bipartisan infrastructure law, including almost $50 billion in Department of Energy loans already agreed upon and another $280 billion worth of loan requests under review. The executive order, titled "Unleash American Energy," instructed all agencies to immediately pause the disbursement of funds appropriated through the acts, putting disbursements such as a $9 billion conditional loan to DTE Energy and a $3.5 billion loan to PacifiCorp in peril. The move sent a shockwave through the clean energy sector, signaling Trump's intent to undermine Biden's industrial policy and programs to speed up an energy transition. Investors fear that another $300 billion worth of future federal funding, mostly from the infrastructure law, would also be frozen by Trump's move, increasing the risk of stranded capital for manufacturing projects already underway.

Investors pull back on clean energy funds: Investors withdrew approximately $30 billion from climate-focused mutual funds in 2024, marking the first year since at least 2019 that redemptions exceeded investments. The total assets under management in climate-focused funds dropped for the first time to $533 billion, despite a seven-fold growth in the preceding four years to a record $541 billion. According to Morningstar's provisional figures, sales of climate-focused funds fell from a peak of $151 billion globally in 2021 to redemptions of $29 billion last year. Sales declined despite growing calls for the private sector to provide more capital to address climate change.

Plastic producers look to buildings to fuel growth: There is a widespread consensus that single-use plastics are detrimental to environmental and human health, with 8 in 10 Americans supporting a national policy to reduce their use. In response, the fossil fuel industry is seeking new applications for its products, planning to double or triple plastic production within 25 years, focusing on the built environment. The built environment significantly contributes to plastic and carbon emissions, accounting for 17% of total plastic production globally and roughly 40% of global greenhouse gas emissions. The use of materials in building construction, particularly those with high petrochemical content, has not received sufficient public attention, but this is starting to change with the growing analysis of embodied-carbon and petrochemical footprints.

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