The Impact Innovator | Issue 292
In this week's The Impact Innovator edition:
Large companies in the European Union will have to identify and take remedial action if they find their supply chains employing child labour or damaging the environment, the bloc's lawmakers and council of member states agreed on Thursday.?The negotiations on the landmark EU law began on Wednesday and went into the early hours of Thursday as representatives sought agreement on contentious issues, in particular whether to include financial firms within rules that are expected to come into force around 2027.?"The Council and the European Parliament today reached a provisional deal on the corporate sustainability due diligence directive (CSDDD), which aims to enhance the protection of the environment and human rights in the EU and globally," the council said in a statement.
In a win for EU states where similar national rules already exist, financial firms will be temporarily excluded from due diligence of clients who take out loans or make investments, and only have to check for forced labour or environmental harms within their own operations. The exclusion from external due diligence would be reviewed at a later date. The deal also strengthened obligations for large companies, including financial firms, to adopt and put into effect a transition plan with time-bound targets for climate change mitigation, which lawmakers had pushed for. The law will override current voluntary net zero pledges at banks and other financial firms, which have largely failed, and fast track the sector to align with the Paris Agreement, said the World Benchmarking Alliance, which tracks sustainability of large companies.?The rules will apply to companies in the EU that have more than 500 employees and a net worldwide turnover of 150 million euros ($163.25 million). For non-EU companies it will apply if they have 300 million euros of net turnover generated in the bloc, three years from the rules coming into effect. Fines for breaching the rules could be as much as 5% of a company's global turnover.
Every UN climate COP ends with a mix of relief, exhaustion and bafflement. The two-week COP28 conference in Dubai was no exception.? It ran nearly 24 hours over schedule and headlines centred on 34 agonisingly crafted words in the final text that called on countries to shift away from fossil fuels in energy systems. Markets do not move and change does not magically happen with such words, even though these were the first of their kind in nearly 30 years of COPs. The power of these meetings lies instead in their ability to normalise the once unthinkable, which is why exhausted delegates haggle so fiercely over a final outcome. But COPs are changing too. Behind the fraught diplomatic negotiations, countries and companies have begun to forge less visible agreements to take more immediate and concrete climate action that could cut demand for fossil fuels and eliminate potent emissions. Three pledges made at COP28 are worth looking at in detail. Big oil’s clean-up charter While oil and gas companies have not yet committed to producing less fossil fuels, their pledge to cut emissions from their own operations is noteworthy. Saudi Aramco, ExxonMobil and BP were among 50 of the world’s top fossil fuel producers to sign the “oil and gas decarbonisation charter”, a voluntary agreement to stop routine flaring of excess gas by 2030 and eliminate almost all leaks of methane, a powerful greenhouse gas.?Some of the biggest oil companies have already promised zero routine flaring and near-zero methane, he says, and a number have shown that big progress can be made on the latter. “With ongoing monitoring, detection and mitigation, near-zero methane feels quite achievable,” he says. But zero routine flaring may be trickier. In an ideal world, excess gas would be piped off and sold for extra revenue. But that can be hard in offshore sites, where most flaring happens, because it’s costly to build the necessary gas export facilities.? Multiplying renewables A second COP28 commitment could affect demand for fossil fuels by tripling the world’s renewable energy generation capacity to at least 11,000 gigawatts by 2030. More than 120 countries signed up to this pledge, which will require a big leap in effort from what has been done before. It took 12 years from 2010 to 2022 to achieve the last tripling of renewable capacity. This one has to be done in the space of eight. Meeting the goal will be “hard, but achievable,” according to analysts at the BloombergNEF research group who have assessed the commitment.? More efficient energy The third COP28 commitment with implications for hydrocarbons is aimed at boosting energy efficiency. More efficient and smart use of energy is widely referred to as the “first fuel” in clean energy transitions because it offers some of the quickest and most cost-effective options for cutting emissions, lowering energy bills and bolstering energy security.? The technology and policies required are already well established, from heat pumps and greener lightbulbs to low-carbon building codes and transport. Article continues here.
Ara Partners, a Houston-based private equity and infrastructure firm?with a focus on industrial decarbonization , said Dec. 13 that it had closed over $3 billion of new capital commitments. The firm's Ara Fund III closed with $2.8 billion in limited partner commitments alongside limited partner co-investment vehicles. These commitments allowed the firm to beat its $2 billion target. Rede Partners acted as placement agent, and Debevoise & Plimpton LLP served as legal counsel in the formation of Fund III. Ara Managing Partner Charles Cherington said global opportunities in industrial decarbonization has led to growing investor confidence in the fund’s strategy. Fund III has already made four portfolio investments, with a focus on European companies. The fund has invested in Vacuumschmelze, a German producer of advanced magnetic materials; CFP Energy, a London-based renewable power solutions provider; Genera, a Tennessee-based producer of sustainable packaging; and Cycle?, a London-based developer of biomethane facilities.
Ara’s latest fund and investments follow the firm?closing Ara Fund II in 2021 with over $1.1 billion ?in capital commitments. Ara Fund II was also oversubscribed — the fund’s initial target was $650 million — and it enabled Ara Partners to expand to Europe with an office in Dublin. The firm has approximately $5.6 billion assets under management. Fund III follows developments in Ara Partners’ local portfolio companies in the past year or so. Hydrogen and decarbonization technology company Utility Global?opened new office space in the Energy Corridor ?earlier this year after completing a pilot test in 2022. Meanwhile, Houston-based Circulus Holdings PBLLC?scored $300 million in financing ?in October 2022, three years after Ara began backing the company.
Fourth Power , a Boston, MA-based provider of utility-scale thermal battery solutions, raised $19M in Series A funding.?The round was led by DCVC, with participation from Breakthrough Energy Ventures and Black Venture Capital Consortium.?The company intends to use the funds to expand operations and its business reach.?Led by CEO Arvin Ganesan, Fourth Power provides utility-scale thermal battery solutions that store renewable energy as heat for short and long durations to dispatch electricity to the grid in seconds. Developed by MIT and Georgia Tech scholars, the company aims to supply clean power using innovative thermal technology with thermophotovoltaic (TPV) solar cells, turning the light from heated carbon blocks into electricity.
Fourth Power’s system converts renewable energy to heat, or thermal energy, which can be stored until needed. The thermal battery heats liquid tin and moves it through a piping system to heat stacks of carbon blocks until they glow white hot. The system then exposes thermophotovoltaic (TPV) cells to the light and converts it into electricity. The solution is designed to maximize the value of renewable energy generation and offer grid operators control and flexibility at the lowest cost compared to other energy storage options. The system is also modular and scalable by adding more carbon blocks to increase storage duration, allowing growth with the grid as renewable generation increases.
An Ithaca, New York-based company called?Dimensional Energy? produces sustainable aviation fuel from carbon dioxide emissions and water, and the company said today it has closed $20 million in a Series A round to ramp up renewable jet fuel production.??Envisioning Partners ?led the latest funding, which brings its total raised to $28 million, with strategic participation from investors including United Airlines’ sustainable flight fund, Microsoft’s climate innovation fund, RockCreek’s smart aviation futures fund, DSC Investment, Delek US, New York Ventures and existing investors like Elemental Excelerator and Chloe Capital.?“The extraction and production of hydrocarbons has resulted in not only climate change but the displacement of indigenous people globally and myriad environmental catastrophes,” Dimensional Energy founder and CEO Jason Salfi told TechCrunch. “Dimensional Energy makes a replacement for oil from carbon dioxide and water. Dimensional is committed to sourcing feedstocks in balance with nature and communities where plants are built.”?
The company plans to use the new capital to construct an advanced power-to-liquid fuels plant, utilizing emissions from Lafarge’s Richmond Cement Plant in British Columbia, Canada,?in partnership with ?carbon capture tech company Svante. Dimensional also earmarked part of the raise to develop a 200-barrel-per-day commercial power-to-liquid facility in New York and introduce its first consumer (B2C) and B2B products, including fossil-free surf wax and a cruelty-free fat alternative customized for vegan food companies.? ?Dimensional generates revenue via contracted offtake agreements, Salfi said, adding that it is actively looking for additional long-term contracts with airlines and specialty chemical companies. On top of that, the company will develop projects in partnership with EPCs (engineering, procurement and construction) to expand its business, the CEO noted.?
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The U.S. clean energy manufacturing sector got a?major boost Thursday when the Internal Revenue Service released?long-awaited tax credit rules .?The?2022?Inflation Reduction Act created unprecedented manufacturing incentives for wind, solar, batteries and critical materials produced in the U.S., but companies needed to see finalized rules before they could properly claim the credits. Now guidance is out — the?IRS?published the text in the Federal Register on Friday, kicking off a?final?60-day comment period to fine-tune it.?The new tax rules tell the clean energy industry exactly how it will benefit from manufacturing essential products in the United States and what rules it must abide by to secure the incentives. For instance, the credits require that the maker actually sells the item in question; factories can’t make things just for the purpose of claiming a?tax credit. And the credits run through?2030, before tapering off to nothing by?2033.
That specificity is welcome news for producers of solar panels, batteries and wind turbines, which are hoping to build up domestic U.S. supply chains capable of rivaling much bigger operations in Asia. But the tax credits also proffer potentially transformative assistance to the up-and-coming?long-duration energy storage ?and thermal storage sectors. The tax credits for thermal storage, in particular, could help jump-start efforts to?decarbonize heavy industry ?if they enable that technology to replace the burning of fossil fuels as a?means of generating intense heat. Each step of solar power manufacturing receives its own tax credit, from polysilicon production through wafer slicing, cell fabrication and module assembly. Related components like backsheets, trackers and inverters earn manufacturing credits too. Domestic solar cells will earn?4?cents per watt (measured in direct current), and modules generate?7?cents per?watt.?Wind power equipment gets a?similar treatment, even extending to vessels built or retrofitted to perform offshore wind installations, which now earn a?credit worth?10% of the sale?price.
BNP Paribas announced the launch of its new BNP Paribas Climate Impact Infrastructure Debt fund.?The initiative is a collaborative effort involving BNP Paribas Asset Management (BNPP AM), BNP Paribas Corporate & Institutional Banking (BNPP CIB) and BNP Paribas Cardif.?The fund is designed to provide comprehensive financing solutions to projects and entities involved in energy transition and climate change mitigation.?The fund, managed by BNPP AM’s Private Assets division, is structured as a Luxembourg Reserved Alternative Investment Fund (RAIF) and classified as Article 9 under the Sustainable Finance Disclosure Regulation (SFDR).?It aims to raise €500-750 million from institutional investors, including an initial seeding commitment from BNP Paribas Cardif.
The fund is expected to maintain an investment-grade profile and will focus on supporting energy transition projects in continental Europe. These projects will align with the fund’s investment philosophy, concentrating on renewable energy, clean mobility, the circular economy and emerging sectors like batteries, hydrogen and carbon capture. Already, three investments have been secured for the fund, including financing for a low-carbon energy producer, a green-sourced district heating platform and a portfolio of onshore wind farms. The fund benefits from the collaboration within BNP Paribas Group, leveraging both internal and external origination teams. The sourcing capability is enhanced by BNP Paribas CIB’s Low Carbon Transition Group, which has over 200 investment professionals and an annual global origination exceeding €20 billion and BNPP AM’s infrastructure and sustainable finance experience.
Researchers from Qatar University and Jordan’s Hussein Technical University have found a way to double the power produced from a type of solar tower. The “twin technology solar system” they report in the journal?Energy Reports ?can produce energy all day and all night.?Solar panels, which absorb light and turn it into electricity using photovoltaic materials, are a conventional, well-known technology to harvest the sun’s energy. The concept behind the new?solar tower ?system is very different. It relies on the fact that hot air rises.?Such?solar updraft towers ?are typically made from glass or other greenhouse materials that trap heat. The air is heated at ground level and as it rises up the tall tower, it spins a turbine to produce electricity. But the idea remains experimental. Costs of building the large, tall glass towers remains prohibitive for mainstream use.
The new twin-technology tower could bring down cost by producing over twice as much power as previous designs, say the researchers. Their design entails building a secondary tower around the inner tower. The second tower is a cooling tower, in which air would be sent downward to spin another turbine. To accomplish this, the researchers propose spraying a fine mist of water into the hot air that reaches the top of the tower, making it cooler and sending it downward.?Using simulations of the tower combined with local weather data, the team estimated that it would generate a total of about 753 megawatt-hours of energy annually. That is about 2.14 times the power of a traditional solar updraft tower. The external cooling towers would produce about 400 megawatt-hours, and the inner heating tower working better during the day under the hot sun to generate around 350 MWh.?The researchers found that seasonal variations in temperature and humidity affected the external tower more, so its output power swung widely throughout the year. Its performance decreases significantly in high humidity, they say, so it is best used in areas with hot and dry weather. They tested their simulation in Riyadh City, which is a hot, dry desert climate, and the results show that the system could be beneficial to deploy there.
Until recently, a store selling groceries in a village in Zambia couldn’t sell cold drinks: It didn’t have access to electricity to power a fridge. But the store now has a solar panel on the roof connected to a solar fridge that’s stocked with drinks and ice. The business owner has nearly doubled overall sales.?The store was one of the first to get a new fridge designed by?Amped Innovation , a Bay Area-based company that’s now scaling up production of the appliance. They wanted to help tackle a widespread problem—even though the energy grid is quickly growing in Africa, millions of people still aren’t connected or have to deal with frequent outages.?Without a refrigerator, or with spotty power, healthcare clinics can’t safely store some medicines and vaccines. More food gets wasted; farmers throw out a large percentage of food before it even gets to market. Nearly half the fish caught each day in sub-Saharan Africa is wasted because it can’t reliably be stored. Families have to spend time each day shopping for perishable food.
The new fridge, called the?EasyFreeze , isn’t the first designed to run on solar power. But other options can cost between $1,300 and $2,000. Amped, which already sells home solar systems in developing countries, wanted to develop a more affordable refrigerator. Backed by a grant from?Efficiency for Access , which was sponsored by Ikea Foundation and the U.K. government, it spent two years on a new design.?The designers also replaced an expensive lithium-ion battery with an “ice battery” that costs 95% less. Ice pouches with chemicals that can absorb and release heat are built into the wall of the unit. The solar power “recharges” the ice battery, which can then stay cold for 40 hours. If someone has spotty grid power, they can also plug the fridge into an outlet and charge it when electricity is available.?
The equipment is assembled locally to avoid steep import fees. “No matter how innovative you are on the product, if you don’t consider every single cost from end to end to getting it out to rural customers in Africa, you’re not going to meet your targets,” says Kleissner. The changes reduced the cost enough that the payback period for a small business can be less than a year. It’s still far from cheap—the local distributors who sell the fridge to customers can charge as much as $900, though Amped works with other partners to offer low-cost loans, and distributors offer additional financing. But if a business uses the appliance to sell ice, they can significantly increase their income.
Researchers have taken photographs of children’s retinas and screened them using a deep learning AI algorithm to diagnose autism with 100% accuracy. The findings support using AI as an objective screening tool for early diagnosis, especially when access to a specialist child psychiatrist is limited.?At the back of the eye, the retina and the optic nerve connect at the optic disc. An extension of the central nervous system, the structure is a window into the brain and researchers have started capitalizing on their ability to easily and non-invasively access this body part to obtain important brain-related information.?Recently, UK researchers created a non-invasive means of rapidly?diagnosing concussion ?by shining an eye-safe laser onto the retina. Now, researchers from Yonsei University College of Medicine in South Korea have developed a method of diagnosing autism spectrum disorder (ASD) and symptom severity in children using retinal images screened by an AI algorithm.
The researchers recruited 958 participants with a mean age of 7.8 years and photographed their retinas, resulting in a total of 1,890 images. Half of the participants had been diagnosed with ASD, and half were age- and sex-matched controls. ASD symptom severity was assessed using Autism Diagnostic Observation Schedule – Second Edition (ADOS-2) calibrated severity scores and Social Responsiveness Scale – Second Edition (SRS-2) scores. A convolutional neural network, a deep learning algorithm, was trained using 85% of the retinal images and symptom severity test scores to construct models to screen for ASD and ASD symptom severity. The remaining 15% of images were retained for testing. For ASD screening on the test set of images, the AI could pick out the children with an ASD diagnosis with a mean area under the receiver operating characteristic (AUROC) curve of 1.00. AUROC ranges in value from 0 to 1. A model whose predictions are 100% wrong has an AUROC of 0.0; one whose predictions are 100% correct has an AUROC of 1.0, indicating that the AI’s predictions in the current study were 100% correct. There was no notable decrease in the mean AUROC, even when 95% of the least important areas of the image – those not including the optic disc – were removed.
“Our models had promising performance in differentiating between ASD and TD [children with typical development] using retinal photographs, implying that retinal alterations in ASD may have potential value as biomarkers,” said the researchers. “Interestingly, these models retained a mean AUROC of 1.00 using only 10% of the image containing the optic disc, indicating that this area is crucial for distinguishing ASD from TD.” The mean AUROC value for symptom severity was 0.74, where an AUROC of 0.7 to 0.8 is considered ‘acceptable’ and 0.8 to 0.9 is ‘excellent’. Study participants were as young as four. Based on their findings, the researchers say that their AI-based model could be used as an objective screening tool from that age onwards. Because the newborn retina continues to grow until the age of four, further research is needed to ascertain whether the tool would be accurate for participants younger than that.