Connect with us

Published

on

The World Needs $9T Annually by 2030 to Close Climate Finance Gap

The importance of climate finance in driving green investments has never been more pronounced as highlighted by Avangrid’s True North solar project in Falls County, Texas. The project, benefiting from subsidies under the Inflation Reduction Act, reflects a growing trend towards climate-friendly initiatives supported by government incentives.

However, meeting global climate goals requires significant scaling up of investments in renewable energy, energy efficiency, and ecosystem restoration. The International Renewable Energy Agency estimates that an average of 11,000 gigawatts of renewable power capacity needs to be built annually until 2030, calling for substantial financial commitments.

Bridging the Climate Funding Gap

According to the Climate Policy Initiative, global climate finance needs to increase to about $9 trillion annually by 2030 to limit average global temperature rises in line with the Paris Agreement. Europe alone requires €800 billion in energy infrastructure investment to meet its 2030 climate targets. The region needs a total of €2.5 trillion needed for the green transition by 2050.

$9 trillion climate finance by 2030

In 2021-22, climate financing reached almost $1.3 trillion, a significant increase from $364 billion in 2011-12. Most of this growth is attributed to mitigation finance, particularly in renewable energy and transport sectors. Notable increases are in clean energy investments in China, the United States, Europe, Brazil, Japan, and India. 

However, adaptation finance lags behind, reaching only $63 billion in 2021-22. This is far from the estimated $212 billion needed by developing countries alone by 2030. Adaptation finance aims to enhance communities’ resilience to climate hazards, but funding falls short. 

Analysts estimate that the $9 trillion has to rise to over $10 trillion annually from 2031 to 2050.

climate financing gap 2030 - 2050

To address this financing gap, governments are exploring various mechanisms, including wealth taxes, levies on shipping, and corporate taxes. For instance, the US plans to raise $300 billion over a decade through a minimum tax on corporate profits and a stock buyback tax to fund climate initiatives.

Ramping Up Climate Finance

The urgency of climate finance has been underscored by international commitments to phase out fossil fuels and triple renewable energy capacity by 2030. 

The upcoming COP29 conference in Baku, Azerbaijan, is expected to focus extensively on climate finance, particularly establishing global goals to support developing nations’ transition efforts.

The private sector has a significant role in financing the green transition (70%), but the public sector must also contribute. The International Energy Agency suggests that public finance will need to cover about 30% of global climate finance. Public funds should primarily focus on critical infrastructure and adaptation measures.

Governments are exploring various revenue-raising options, including carbon pricing mechanisms and taxes on fossil fuel extraction. Ireland’s carbon tax, for example, allocates increased revenues to climate-related investments and fuel poverty prevention.

Other countries are considering innovative financing approaches, such as windfall taxes on oil and gas companies and tourism taxes. Additionally, efforts are underway to phase out fossil fuel subsidies, redirecting funds towards climate action initiatives.

Navigating the Climate Financing Maze

Despite the financing challenges, energy strategist Kingsmill Bond argues that capital is available but must be deployed effectively. Intelligent regulation and incentives like the EU’s REPowerEU strategy can mobilize private investments in renewables and drive sustainable growth.

In developing countries, where financial constraints are more pronounced, international cooperation and concessional financing are crucial. Sovereign green bonds and climate finance frameworks aim to mobilize private sector investment and support green projects in emerging economies.

The authors of the CPI’s Global Landscape of Climate Finance 2023 report suggest that closing the funding gap is theoretically feasible, particularly given global spending trends. They point out that while global military spending reached $2.2 trillion in 2022 (SIPRI, 2023), emergency fiscal measures totaling $11.7 trillion were announced globally in response to the COVID-19 pandemic in 2020, according to the International Monetary Fund.

CPI climate finance in context
Source: CPI report

Moving forward, the CPI recommends addressing inequalities in current climate finance distribution. Despite agriculture and industry being significant emission sources, they received disproportionately low funding in 2021-22 relative to their mitigation potential. The report also emphasizes the importance of investing in emerging technologies like battery storage and hydrogen, highlighting untapped investment opportunities.

Ultimately, achieving a sustainable and resilient future requires concerted efforts from governments, businesses, and financial institutions. By shifting financial resources towards climate-friendly investments, the global community can accelerate the transition to a greener economy and mitigate the impacts of climate change.

The post The World Needs $9T Annually by 2030 to Close Climate Finance Gap appeared first on Carbon Credits.

Continue Reading

Carbon Footprint

Honda Backs U.S. Farmers With Regenerative Agriculture to Drive Its Net-Zero Future

Published

on

Honda is taking a new step toward its climate goals by supporting farmers across the United States. The company has joined Carbon by Indigo, a leading regenerative agriculture program that helps farmers improve soil health, capture carbon, and boost their income. Through this partnership, Honda is backing 1,800 metric tons of soil carbon removals, which brings the company closer to its long-term decarbonization targets.

Mahjabeen Qadir, sustainability strategy lead at Honda Development & Manufacturing of America, LLC, said:

“For over 40 years, Honda has supported farmers near our Ohio operations through conservation programs that protect farmland and help expand access to markets for their crops. Now, Honda is building on that history by supporting regenerative agriculture practices that help farmers manage climate challenges and maintain healthy farmland for future generations.”

Regenerative Farming: A Simple Way to Heal Soil and Cut Emissions

Regenerative agriculture is becoming a powerful tool in the fight against climate change. It helps the soil store more carbon, keeps water in the ground, and strengthens farms against extreme weather.

Carbon by Indigo: Empowering Farmers With High-Value Carbon Credits

Farmers who join Carbon by Indigo receive guidance on practices like:

  • Planting cover crops
  • Reducing tillage
  • Rotating crops
  • Using nitrogen more efficiently

These methods build healthier soil and reduce runoff. They also improve air quality and make farmland more resilient over time.

The company produces high-quality agricultural soil carbon credits that help farmers strengthen their bottom line while enabling corporations to reduce risk by supporting carbon removals, emission reductions, and water benefits.

  • Under its standard program, the company returns 75% of the carbon credit purchase price to the farmer.

In this case, farmers generate verified soil carbon credits that companies like Honda purchase to offset hard-to-eliminate emissions.

Carbon by Indigo Program Highlights

indigoag carbon credits Carbon by Indigo
Source: Carbon by Indigo

Dean Banks, CEO of Indigo Ag, said:

“Indigo proudly works with companies like Honda to take action on achieving their climate goals while creating impact for the communities in which they operate. The Carbon by Indigo program builds prosperity from the ground up, with tangible benefits for local communities and their environment: cleaner air and water, more resilient soil and crop production, additional income for farmers and their families, and a legacy of stewardship across generations.”

Water Conservation and Carbon Removal Go Hand in Hand

Even though water conditions vary by region, the project achieved a notable result: on average, each metric ton of carbon removed conserved approximately 69,000 gallons of water. This demonstrates how regenerative practices enable farmers to adapt to changing climate conditions while enhancing productivity.

Supporting 150 Farmers Across Five States

Honda’s investment supports about 150 farmers near its U.S. operations in Alabama, Indiana, Ohio, North Carolina, and South Carolina. Altogether, these farmers manage 214,000 acres of farmland using regenerative methods.

Importantly, all carbon credits in the Carbon by Indigo program are independently verified by Aster Global Environmental Solutions and issued by the Climate Action Reserve, a widely trusted carbon registry.

READ MORE:

Honda’s Road to Decarbonization: Cutting Emissions From Products and Operations

Honda has shown leadership in environmental efforts for over 50 years. Now, the company is moving quickly toward an electric and low-carbon future.

  • It reported 296.86 million t-CO₂e in total global greenhouse gas emissions for FY2025. About 80% of these emissions come from product use (Scope 3 Category 11). The remaining 20% comes from direct operations and upstream/downstream activities.

Because of this, Honda is prioritizing emission cuts from product use and business operations. The company aims to reach full carbon neutrality by 2050, aiming to increase sales of electric and hybrid vehicles in North America and other major markets.

honda carbon emissions
Source: Honda

Triple Action to ZERO: Honda’s Framework for a Sustainable Future

Honda’s clean energy target is ambitious, and its environmental vision is shaped by its “Triple Action to ZERO” strategy, which includes:

  1. Carbon Neutrality – achieving net-zero CO₂ emissions
  2. Clean Energy – switching fully to carbon-free energy sources
  3. Resource Circulation – creating products with sustainable and recyclable materials

These three actions connect to global climate and biodiversity goals. Honda also supports Nature-based Solutions, such as restoring forests and ecosystems, to increase its positive environmental impact.

Honda also trains suppliers through the Green Excellence Academy and supports dealerships through the Environmental Leadership Program, so the entire value chain can lower emissions.

Protecting Biodiversity Across the Globe

Honda is protecting ecosystems near its facilities through forest projects and greenbelt expansion. In Ohio, the company created the Honda Power of Dreams Forest, planting 85,000 trees over 40.5 hectares to restore riparian zones and create wildlife habitats.

Similar initiatives are underway in Europe and Brazil. In Belgium, Honda is restoring black poplar trees and building insect hotels and ponds to boost biodiversity. In the Amazon rainforest, Honda maintains 80% of its motorcycle test course as a protected conservation area and supports replanting endangered species like mahogany and rosewood.

A Long-Term Commitment to a Cleaner Future

Honda’s partnership with Carbon by Indigo reflects its broader mission to cut emissions, expand clean energy, and support sustainable communities. Through regenerative agriculture, renewable energy, circular manufacturing, and biodiversity programs, Honda is building a pathway toward a Zero Environmental Impact Society by 2050.

regenerative farming
Source: Modor Intelligence

These efforts show how large companies can support climate solutions while strengthening local communities and protecting the planet for future generations.

The post Honda Backs U.S. Farmers With Regenerative Agriculture to Drive Its Net-Zero Future appeared first on Carbon Credits.

Continue Reading

Carbon Footprint

Japan to Restart the World’s Largest Nuclear Power Plant

Published

on

Japan to Restart the World's Largest Nuclear Power Plant

Japan is moving toward restarting the Kashiwazaki-Kariwa nuclear power station, the world’s largest by capacity. The move could change the country’s energy policy, which relies on atomic power to tackle high fuel costs, boost energy security, and reduce carbon emissions.

The nuclear plant is run by Tokyo Electric Power Company (TEPCO), and the restart of its biggest units, No. 6 and No. 7, together producing about 2,710 megawatts (MW), could happen soon, if regulators and local authorities approve.

It is the governor of Niigata prefecture who moves to approve the restart of the Kashiwazaki-Kariwa facility. Hideyo Hanazumi plans to hold a press conference to announce his decision and said he will consult with the prefectural assembly. If the assembly also agrees, the restart will be officially authorized. He said during a media briefing:

“I would like to make a decision and express it soon.”

A Long Road Back: Why Japan’s Nuclear Revival Matters

After Fukushima in 2011, Japan shut down nearly all its reactors, and restarting them has been slow. By late 2024, only 14 reactors had started back up under the stricter post-Fukushima rules.

Japan nuclear reactor current status
Source: Renewable Energy Institute

Kashiwazaki-Kariwa, also called KK, has a total capacity of 8,212 MW, making it the largest nuclear power plant in the world. The facility has mostly sat unused since 2012. This happened after safety worries and stricter rules came in after the 2011 Fukushima disaster.

In December, regulators lifted a de facto ban that had blocked TEPCO from loading fresh nuclear fuel into the plant. The company has done safety inspections and is now seeking approval from Niigata Prefecture. This includes getting the governor’s okay, as they have a lot of influence over the decision.

If approved, restarting even part of Kashiwazaki-Kariwa could dramatically boost Japan’s nuclear output. For TEPCO, this move may lower operating costs, reduce dependence on costly imported fuels, and improve its long-term financial outlook.

Japan’s Nuclear Comeback: The Bigger Picture

Nuclear’s share in Japan’s electricity mix has begun to rise, per the ISEP data. In fiscal year 2023, nuclear energy made up 8.5% of the country’s power generation. It is the highest level since before Fukushima. Fossil fuels, especially LNG and coal, still supply the bulk of power.

Japan Electricity Generation Mix Over Time (2016–2024)
Data source: ISEP

The country still has far to go. Many reactors remain offline as utility firms seek regulatory approval and local consent. The largest plant, Kashiwazaki-Kariwa, could add back several gigawatts if its units restart. 

Policy now backs a larger nuclear role. The government’s strategic energy plan targets roughly 20% nuclear by 2040, alongside a big push for renewables (40–50%). These goals aim to cut fuel import bills and lower emissions, but they will require many more restarts, life extensions, or new builds.

Japan Nuclear Power Capacity in Operation projections
Source: Renewable Energy Institute

The commercial case for more nuclear in Japan rests on several factors. Restarted reactors reduce costly LNG use and help utilities stabilize generation costs. They also provide steady, low-carbon baseload power that complements intermittent renewables.

On the other hand, safety upgrades, decommissioning risks, and local opposition impose large financial and political costs.

In short, Japan’s nuclear comeback is real but cautious. Progress relies on a few key factors:

  • Regulatory approvals,
  • Local consent, ongoing safety investments, and
  • Nuclear’s ability to compete with cheaper renewables and storage as they grow.

Small but Mighty: Japan’s Growing Interests in SMR 

Japan is also studying the use of Small Modular Reactors, or SMRs, as part of its longer-term energy plan. These reactors are smaller and can be built in factories, which may reduce costs and construction time. They could help Japan add more nuclear power without the long delays that come with large plants. 

Several Japanese companies are already working with international partners to develop SMR designs. IHI, a leading equipment maker, is working with a U.S. firm, NuScale Power, on modular reactor technology. They have built full-scale mock-ups to test their engineering systems. 

Chubu Electric Power, one of the country’s major utilities, has also announced plans to invest in SMR projects at home and overseas. These steps show rising industry interest in this new type of reactor.

Even with this momentum, Japan’s SMR plans are still at an early stage. The government has not yet completed a full regulatory framework for these reactors. Safety rules, design standards, and licensing pathways still need more work before construction can begin. 

  • Japan faces key economic questions. Can SMRs compete with renewables, large reactors, and imported fuels?

Because of these factors, experts expect SMRs to grow slowly. The Asian country may first use them for research or for exports before they appear in domestic power grids.

Still, as the country looks for low-carbon energy and more stable power supplies, SMRs are becoming part of the national discussion about the future of nuclear power.

Hurdles Ahead: Safety, Costs, and Local Concerns

Even with regulatory and political momentum, restarting Kashiwazaki-Kariwa faces hurdles. Local consent remains a key issue: the governor needs the nod of the prefectural assembly. 

Safety is a major concern. TEPCO must run the plant under the tougher standards imposed after Fukushima. For residents near the plant, the disaster’s memory is still strong. This leads to local resistance in some communities.

There are financial risks, too. Restarting nuclear plants requires huge investments in safety upgrades, regulatory compliance, and community relations. If the market for electricity or nuclear power shifts, these costs could pose a burden.

Strategic Impact on Japan’s Energy Market

If put back online, Kashiwazaki-Kariwa could play a key role in lowering Japan’s import bill for liquefied natural gas (LNG). Japan is one of the world’s largest LNG importers, and atomic power offers a way to reduce its reliance on volatile markets.

More nuclear generation could also support Japan’s climate goals. The government’s energy roadmap targets a big increase in nuclear while also expanding renewables, aiming for a 40–50% renewable share by 2040. In that plan, nuclear provides a stable, carbon-free “baseload” to complement fluctuating solar and wind power.

The restart could also reshape investor sentiment. Utilities, financial institutions, and even global energy analysts are watching closely. A strong comeback of large nuclear power could show faith in Japan’s atomic revival. This might also encourage long-term investments in its nuclear industry.

Why the Restart is Significant Globally

Japan’s potential restart of the world’s largest nuclear plant comes at a moment when many countries are rethinking nuclear power. Rising energy prices, geopolitical instability, and stronger climate targets make nuclear more attractive. A revival in Japan could influence other nations to reconsider or expand their own nuclear programs.

For TEPCO, a successful restart strengthens its case for nuclear as a core part of its business. For the region, it offers more stable energy, local economic support, and lower emissions. And for Japan, it could signal that the nuclear sector is fully back in its long-term energy mix.

If the governor of Niigata approves the restart as expected, Japan may very soon add a major source of clean, reliable power — and a potent symbol of its atomic revival.

The post Japan to Restart the World’s Largest Nuclear Power Plant appeared first on Carbon Credits.

Continue Reading

Carbon Footprint

Petrobras and BNDES Launch a 5-Million Carbon Credit Push to Regrow Brazil’s Amazon

Published

on

Petrobras and BNDES Launch a 5-Million Carbon Credit Push to Regrow Brazil's Amazon

Petrobras and the Brazilian Development Bank (BNDES) opened a public call for proposals under the ProFloresta+ program to buy 5 million high-integrity carbon credits tied to Amazon restoration. The move seeks to boost forest restoration in the Amazon. It will also set a clear price benchmark for restoration credits and aims to create jobs and attract finance in the restoration sector.

What Petrobras and BNDES Want from Developers

The public notice covers five contracts of 1 million carbon credits each. Each contract must be backed by ecological restoration on at least 3,000 hectares. Contracts will last for 25 years. They will focus on areas within the Amazon biome. This includes both private land and public land with forest concessions.

Key facts in brief:

  • Five contracts × 1 million credits.
  • Minimum 3,000 hectares per contract, restored and verified.
  • 25-year crediting and monitoring horizon.

The tender comes at a time when Brazil’s voluntary carbon market is growing. According to market surveys, Brazil issued about 14–16 million voluntary credits per year from 2021 to 2023. ARR (Afforestation, Reforestation, and Revegetation) credits accounted for about 10–15% of these total issuances.

The ProFloresta+ purchase of 5 million credits is a large amount. It’s much larger than the current supply of restoration credits.

Financing the Forest: How ProFloresta+ Unlocks Capital

Petrobras will buy the carbon credits through public tenders. Winning project developers may then get low-interest loans or financing from BNDES to cover upfront costs.

The Brazilian bank created tools to reduce financial risk for restoration companies and landowners. This pairing of long-term offtake and concessional finance is meant to make restoration projects bankable.

Over the past decade, carbon markets have shown that early funding is a barrier for landowners who want to begin restoration. BNDES’ model tries to fix this by offering credit lines with longer repayment periods and by supporting milestone-based contracts. Payments for credits are expected to follow a schedule tied to planting, survival rates, and verified carbon removals.

ProFloresta+ enters a market where ARR credits from the Amazon have sold for US$8 to US$18 per tonne. Prices vary based on quality, verification standards, and project risks. Petrobras hasn’t revealed its expected clearing price yet. However, the public tender sets a reference point for buyers and sellers to see.

ARR carbon credit prices indicative averages
Data Sources: Sylvera, CarbonCredits.com

The chart shows an indicative low, a broad nature-based market average, and an observed Brazil ARR average (USD per tCO₂e).

The Road to 50,000 Hectares

ProFloresta+ is framed as a multi-phase program. The initial phase targets about 15,000 hectares and 5 million credits, backed by roughly R$450 million (about US$77 million).

Over a longer horizon, the program states it can restore up to 50,000 hectares and sequester an estimated 15 million tonnes of CO₂. Organizers also expect thousands of local jobs in planting, maintenance, and monitoring.

Average CO₂ absorption rates help explain the numbers. Research on the Amazon biome shows that restoring native forests can remove 8 to 15 tonnes of CO₂ per hectare each year in early growth.

As the forests mature, they store even more CO₂ over the long term. Assisted natural regeneration can achieve similar rates in degraded lands that still have seed banks. These benchmarks support the program’s estimate of long-term removals.

Amazon deforestation trends also show why the program is urgent. INPE satellite data recorded nearly 13,000 km² of deforestation in 2021, which fell to around 9,000 km² in 2023 after new enforcement measures.

amazon deforestation trend
Source: Mongabay

Scientists estimate that over 54.2 million hectares of the Amazon have been lost in 20 years and need active or assisted restoration. The ProFloresta+ restoration area is small compared with this total, but it can test large-scale finance models.

Officials estimate the pilot will create about 4,500 jobs. It will also set clear rules and prices for restoration credits. Past restoration programs in Brazil and Latin America usually create 2–4 jobs per hectare during planting.

For long-term monitoring and maintenance, they generate 1–2 jobs per hectare. These figures help explain how large-scale planting can support rural employment.

Why This Tender Could Redefine Brazil’s Carbon Landscape

The program marks one of the largest public tenders for restoration credits in Brazil. It links a major corporate buyer (Petrobras) with a development bank to deliver scaled restoration. This structure can do three things:

  • It provides price clarity.
  • It reduces financing gaps for projects.
  • It builds market confidence for high-integrity, nature-based credits.

Brazil is now a leading supplier of forest-related credits worldwide. REDD+, ARR, and agroforestry methods back this growth. But ARR supply has grown more slowly because restoration is expensive and long-term.

The chart shows indicative ARR credit price trends from 2019–2024, starting with broader market averages due to limited early ARR data. Reliable ARR-specific prices were not published in 2019–2020, so the series begins in 2021 with broader voluntary carbon market averages.

Prices rise from about US$4/t in 2021 to over US$7/t in 2022, dip slightly in 2023, then jump sharply in 2024 as demand for high-integrity nature-based removals strengthens.

ARR carbon credit price time series 2024
Data sources: MSCI Carbon Markets, Sylvera

A project involving 3,000 hectares usually needs several million dollars in early investment. Public tenders like ProFloresta+ help bridge this gap.

Public tenders of this size are rare. Indonesia’s peatland and mangrove restoration programs have offered fewer large-volume restoration credit offtake tenders. In contrast, Congo Basin countries have emphasized REDD+ over ARR.

As such, ProFloresta+ is unique. It combines public procurement with development bank financing. It also includes long-term monitoring requirements.

Trust but Verify: How Brazil Will Track Every Tonne

The call requires robust verification and long monitoring periods. Projects must follow recognized restoration practices and provide measurable carbon removals.

BNDES and Petrobras require documentation, monitoring, and a 25-year contract to ensure credits are real, additional, and permanent.

Most Brazilian projects use international standards like Verra VCS or Gold Standard, alongside the national carbon registry, field audits, and remote sensing. Developers must follow restoration protocols, including native species, minimum density, and survival monitoring.

To ensure permanence, 10–20% of credits are often placed in a buffer pool, with some using insurance against fire, drought, or pests. Developers must submit baseline studies, restoration plans, and social-environmental safeguards, and undergo audits and reporting to qualify for credits and BNDES financing. Public tender results will be transparent.

Weighing ProFloresta+’s Impact

Proponents list several benefits of the program:

  • It channels immediate demand and revenue to restoration projects.
  • It uses public procurement to set market standards and prices.
  • It couples purchases with concessional finance to lower project risks.

The program also aims to support social safeguards. Restoration in the Amazon often requires consent from local communities, Indigenous groups, and landholders. Many programs now include benefit-sharing rules, training, and local hiring. Monitoring includes checks on land use rights and social co-benefits.

But limits remain. Restoration takes time; carbon removals accrue over decades. Projects must manage risks such as fires, pests, land-use conflicts, and changing climate conditions.

Credit buyers and financiers need confidence that credits remain valid over long periods. Observers say the program will only prove effective if verification and long-term protection are strong.

A High-Stakes Test for Restoration at Scale

The public call opens the clock for proposals. Petrobras and BNDES will evaluate bids and award contracts. If the pilot goes as planned, the program can expand to more hectares and credits. This might also inspire other companies to start similar tenders. Many energy, aviation, and consumer goods companies in Brazil want to buy carbon credits. This shows that the market is growing.

The tender could strengthen Brazil’s restoration market by proving that public, transparent purchasing and concessional finance can bring large projects to scale. Success will depend on strong verification, durable finance, and effective on-the-ground management across the program’s long timeframe.

The post Petrobras and BNDES Launch a 5-Million Carbon Credit Push to Regrow Brazil’s Amazon appeared first on Carbon Credits.

Continue Reading

Trending

Copyright © 2022 BreakingClimateChange.com