In a major move to reduce dependence on Chinese imports, South Korea’s LG Energy Solution (LGES) has reportedly secured a $4.3 billion deal to supply Tesla with lithium iron phosphate (LFP) batteries for energy storage systems. As the U.S. ramps up tariffs on Chinese goods, the agreement marks a strategic pivot for Tesla, which has heavily relied on China for its battery needs.
Reuters disclosed that neither company has confirmed the deal publicly, but a source familiar with the matter said that the LFP batteries will be produced at LGES’s Michigan factory, which recently began production.
The contract, among LGES’s largest to date, will run from August 2027 through July 2030, with an option to extend for up to seven additional years and increase volumes based on future discussions.
LG Energy Solution’s (LGES) Power Shift: From EVs to Energy Storage
CNBC reported that LG Energy Solution had earlier disclosed a $4.3 billion contract to supply LFP batteries globally over three years, but did not name Tesla as the customer or clarify whether the batteries would be used for electric vehicles or energy storage systems (ESS). However, growing signals point to Tesla’s booming energy business as the likely focus.
With EV demand slowing, LGES has shifted gears toward energy storage. The company is betting on a surge in demand fueled by the rapid expansion of AI data centers and renewable energy installations.
Liz Lee, Associate Director at Counterpoint Research, confirmed to CNBC that the deal is expected to be closely linked to LGES’s Michigan facility, which now serves as its first North American ESS battery manufacturing hub.
This strategic shift comes as LGES considers repurposing some of its U.S. EV battery lines for ESS production in response to weakening EV market dynamics.

Strong Q2 2025
The company recently posted solid second-quarter earnings for 2025, even without North American production incentives. The company reported revenue of KRW 5.6 trillion, down 11.2% from the previous quarter. However, operating profit surged 31.4% to KRW 492.2 billion, with an 8.8% margin. Notably, North American incentives contributed KRW 490.8 billion to the operating profit.
CFO Chang Sil Lee stated,
“In the second quarter, we secured stable EV battery sales and also started production at our new ESS battery facility in North America. However, constrained customer purchase sentiment, coupled with the reflection of metal price decline to our average selling price (ASP), affected our quarterly revenue.”
Moving forward, LGES anticipates a short-term slowdown in EV demand due to new tariffs and cost pressures on automakers. Yet, the company remains optimistic about mid- to long-term growth, driven by advances in autonomous driving and energy storage.
To adapt to this shift, it is focusing on maximizing output at existing production lines, particularly for ESS batteries. It plans to expand its annual production capacity for ESS to 17 GWh by year-end. The company also aims to reduce fixed costs by scaling back investments while securing a competitive supply chain.
Sustainability Goals
Beyond profits, the company is committed to achieving carbon neutrality across its value chain by 2050. One major step involves converting 100% of its power use across all global sites to renewable energy by 2030.
LGES is also working on creating a closed-loop battery ecosystem. With millions of tons of used EV batteries piling up, the company is actively exploring ways to reuse them for energy storage and recycle production waste. These initiatives aim to minimize environmental harm while securing critical raw materials.

- READ MORE: The Battery Shift: How Energy Storage Is Reshaping the Metals Market with LFPs Taking Charge
Tesla’s Push for U.S.-Made Batteries Gains Momentum
The global battery market is shifting rapidly, driven by policy changes like the U.S. Inflation Reduction Act (IRA) and similar initiatives in Europe and the UK. These regulations are encouraging companies to diversify supply chains and reduce reliance on Chinese suppliers. For LG Energy Solution (LGES), this creates a clear advantage. With operational plants in Michigan and an upcoming facility in Arizona, LGES is well-positioned to meet growing U.S. demand while staying aligned with evolving trade rules.
China has long dominated the lithium iron phosphate (LFP) battery space, but LGES is emerging as one of the few manufacturers building significant LFP production capacity on American soil. Its Michigan plant began operations in May, and the Arizona plant is set to further strengthen its U.S. presence.
CEO Elon Musk reinforced the importance of this shift, noting that energy demand is booming despite ongoing tariff and supply chain pressures.
He said during the company’s latest earnings call,
“Not many people realize just how massive battery demand has become.”
While Tesla plans to open its own LFP cell manufacturing facility in Nevada by the end of the year, it’s expected to cover only a fraction of the company’s overall battery needs. That’s where LGES comes in.
Its new U.S.-based capacity provides Tesla with a critical, non-Chinese alternative. The partnership aligns perfectly with Tesla’s goal to localize its battery supply chain—offering both strategic location and advanced manufacturing capability.
Battery Demand Powers Growth Outlook
Tesla’s energy generation and storage division, which includes its Megapack and Powerwall products, continues to play a growing role in its business. Despite overall revenue falling 12% in Q2 2025 to $22.5 billion, the energy segment generated more than $2.8 billion. However, this was a 7% year-over-year drop due to pricing pressure and supply chain challenges.
Still, the segment stands out as a growth area amid softening EV sales. Tesla has stressed that battery demand is growing at an unprecedented pace, making partnerships like the one with LGES essential to scaling operations.

The Rise of Solid-State Batteries
As lithium-ion battery innovation continues, solid-state batteries are emerging as the next frontier in battery technology. These advanced batteries utilize solid ceramic or polymer electrolytes, providing enhanced safety, higher energy density, and longer lifespan.
The global solid-state battery market is expected to grow from $0.26 billion in 2025 to $1.77 billion by 2031, with a projected CAGR of 37.5%, according to MarketsandMarkets.
Solid-State Battery Market Size

Solid-state batteries are ideal for electric vehicles, medical devices, and industrial sensors due to their resistance to leakage and thermal runaway. Primary solid-state batteries, commonly used in smart packaging, RFID tags, and medical patches, will likely dominate the market in the short term.
North America is set to lead in both research and commercialization. U.S. companies like Solid Power, QuantumScape, Sakuu Corporation, and Excellatron are spearheading innovation, with Mercedes-Benz and Factorial Energy collaborating on a technology that could offer EVs over 600 miles of range on a single charge.

Other major players like ProLogium (Taiwan), Ilika (UK), and Blue Solutions (France) are also advancing the global rollout of solid-state battery technologies, signaling a strong future for energy storage innovation.
The LGES-Tesla deal signals a major shift in the energy market. As EV demand slows and energy storage rises, resilient, tariff-friendly supply chains and advanced battery tech are taking center stage. With new U.S. plants and strong sustainability goals, LGES is emerging as a key player in powering Tesla’s energy growth amid global trade and policy shifts.
The post Is Tesla (TSLA) Securing U.S. Battery Independence with $4.3 B LG Energy Solution Deal? appeared first on Carbon Credits.
Carbon Footprint
Climate Impact Partners Unveils High-Quality Carbon Credits from Sabah Rainforest in Malaysia
The voluntary carbon market is changing. Buyers are no longer focused only on large volumes of cheap credits. Instead, they want projects with strong science, long-term monitoring, and clear proof that carbon has truly been removed from the atmosphere. That shift is drawing more attention to high-integrity, nature-based projects.
One project now gaining that spotlight is the Sabah INFAPRO rainforest rehabilitation project in Malaysia. Climate Impact Partners announced that the project is now issuing verified carbon removal credits, opening access to one of the highest-quality nature-based removals currently available in the global market.
Restoring One of the World’s Richest Rainforest Ecosystems
The project is located in Sabah, Malaysia, on the island of Borneo. This region is home to tropical dipterocarp rainforest, one of the richest forest ecosystems on Earth. These forests store huge amounts of carbon and support extraordinary biodiversity. Some dipterocarp trees can grow up to 70 meters tall, creating habitat for orangutans, pygmy elephants, gibbons, sun bears, and the critically endangered Sumatran rhino.
However, the forest within the INFAPRO project area was not intact. In the 1980s, selective logging removed many of the most valuable tree species, especially large dipterocarps. That caused serious ecological damage. Once the key mother trees were gone, natural regeneration became much harder. Young seedlings also had to compete with dense vines and shrubs, which slowed the forest’s recovery.
To repair that damage, the INFAPRO project was launched in the Ulu-Segama forestry management unit in eastern Sabah.
- The project has restored more than 25,000 hectares of logged-over rainforest.
- It was developed by Face the Future in cooperation with Yayasan Sabah, while Climate Impact Partners has supported the project and helped bring its credits to market.
Why Sabah’s Carbon Removals are Attracting Attention
What makes Sabah INFAPRO different is not only the size of the restoration effort. It is also the way the project measured carbon gains.

Many forest carbon projects issue credits in annual vintages based on year-by-year growth estimates. Sabah INFAPRO followed a different path. It used a landscape-scale monitoring system and waited until the forest moved through its strongest natural growth period before issuing removal credits.
- This approach gives the credits more weight. Rather than relying mainly on short-term annual estimates, the project measured carbon sequestration over a longer period. That helps show that the forest delivered real, sustained, and measurable carbon removal.
The scientific backing is also unusually strong. Since 2007, the project has maintained nearly 400 permanent monitoring plots. These plots have allowed researchers, independent auditors, and technical specialists to observe the full growth cycle of dipterocarp forest recovery. The result is a large body of field data that supports carbon calculations and strengthens confidence in the credits.
In simple terms, buyers are not just being asked to trust a model. They are being shown years of direct forest monitoring across the project landscape.
Strong Ratings Support Market Confidence
Independent assessment has also lifted the project’s profile. BeZero awarded Sabah INFAPRO an A.pre overall rating and an AA score for permanence. That places the project among the highest-rated Improved Forest Management, or IFM, projects in the world.
The rating reflects several important strengths. First, the project has very low exposure to reversal risk. Second, it has a long and stable operating history. Third, its measured carbon gains align well with peer-reviewed ecological research and independent analysis.
These points matter in today’s market. Buyers have become more cautious after years of debate over the quality of some forest carbon credits. As a result, they now look more closely at durability, transparency, and third-party validation. Sabah INFAPRO’s rating helps answer those concerns and makes the project more attractive to companies looking for credible carbon removal.
The project is also registered with Verra’s Verified Carbon Standard under the name INFAPRO Rehabilitation of Logged-over Dipterocarp Forest in Sabah, Malaysia. That adds another level of market recognition and verification.
A Wider Model for Rainforest Recovery
Sabah INFAPRO also shows why high-quality nature-based projects are about more than carbon alone. The restoration effort supports broader ecological recovery in one of the world’s most important rainforest regions.
Climate Impact Partners said it has worked with project partners to restore degraded areas, run local training programs, carry out monthly forest patrols, and distribute seedlings to support rainforest recovery beyond the project boundary. These efforts help strengthen the wider landscape and expand the project’s environmental impact.
That broader value is becoming more important for buyers. Companies increasingly want projects that support biodiversity, ecosystem health, and local engagement, along with carbon removal. Sabah INFAPRO offers that mix, making it a stronger fit for the market’s shift toward higher-integrity credits.

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Carbon Footprint
Bitcoin Falls as Energy Prices Rise: Why Crypto Is Now an Energy Market Story
Bitcoin’s recent drop below $70,000 reflects more than short-term market pressure. It signals a deeper shift. The world’s largest cryptocurrency is becoming increasingly tied to global energy markets.
For years, Bitcoin has moved mainly on investor sentiment, adoption trends, and regulation. Today, another force is shaping its direction: the cost of energy.
As oil prices rise and electricity markets tighten, Bitcoin is starting to behave less like a tech asset and more like an energy-dependent system. This shift is changing how investors, analysts, and policymakers understand crypto.
A Global Power Consumer: Inside Bitcoin’s Energy Use
Bitcoin depends on mining, a process that uses powerful computers to verify transactions. These machines run continuously and consume large amounts of electricity.
Data from the U.S. Energy Information Administration shows Bitcoin mining used between 67 and 240 terawatt-hours (TWh) of electricity in 2023, with a midpoint estimate of about 120 TWh.

Other estimates place consumption closer to 170 TWh per year in 2025. This accounts for roughly 0.5% of global electricity demand. Recently, as of February 2026, estimates see Bitcoin’s energy use reaching over 200 TWh per year.
That level of energy use is significant. Global electricity demand reached about 27,400 TWh in 2023. Bitcoin’s share may seem small, but it is comparable to the power use of mid-sized countries.
The network also requires steady power. Estimates suggest it draws around 10 gigawatts continuously, similar to several large power plants operating at full capacity. This constant demand makes energy costs central to Bitcoin’s economics.
When Oil Rises, Bitcoin Falls
Bitcoin mining is highly sensitive to electricity prices. Energy is the highest operating cost for miners. When power becomes more expensive, profit margins shrink.
Recent market movements show this link clearly. As oil prices rise and inflation concerns persist, energy costs have increased. At the same time, Bitcoin prices have weakened, falling below the $70,000 level.

This is not a coincidence. Studies show a direct relationship between Bitcoin prices, mining activity, and electricity use. When Bitcoin prices rise, more miners join the network, increasing energy demand. When energy costs rise, less efficient miners may shut down, reducing activity and adding selling pressure.
This creates a feedback loop between crypto and energy markets. Bitcoin is no longer driven only by demand and speculation. It is now influenced by the same forces that affect oil, gas, and power prices.
Cleaner Energy Use Is Growing, but Fossil Fuels Still Matter
Bitcoin’s environmental impact depends on its energy mix. This mix is improving, but it remains uneven.
A 2025 study from the Cambridge Centre for Alternative Finance found that 52.4% of Bitcoin mining now uses sustainable energy. This includes both renewable sources (42.6%) and nuclear power (9.8%). The share has risen significantly from about 37.6% in 2022.
Despite this progress, fossil fuels still account for a large portion of mining energy. Natural gas alone makes up about 38.2%, while coal continues to contribute a smaller share.

This reliance on fossil fuels keeps emissions high. Current estimates suggest Bitcoin produces more than 114 million tons of carbon dioxide each year. That puts it in line with emissions from some industrial sectors.
The shift toward cleaner energy is real, but it is not complete. The pace of change will play a key role in how Bitcoin fits into global climate goals.
Bitcoin’s Climate Debate Intensifies
Bitcoin’s growing energy demand has placed it at the center of ESG discussions. Its impact is often measured through three key areas:
- Total electricity use, which rivals that of entire countries.
- Carbon emissions are estimated at over 100 million tons of CO₂ annually.
- Energy intensity, with a single transaction using large amounts of power.

At the same time, the industry is evolving. Mining companies are adopting more efficient hardware and exploring new energy sources. Some operations use excess renewable power or capture waste energy, such as flare gas from oil fields.
These efforts show progress, but they do not fully address the concerns. The gap between Bitcoin’s energy use and its environmental impact remains a key issue for investors and regulators.
- MUST READ: Bitcoin Price Hits All-Time High Above $126K: ETFs, Market Drivers, and the Future of Digital Gold
Bitcoin Is Becoming Part of the Energy System
Bitcoin mining is now closely integrated with the broader energy system. Operators often choose locations based on access to cheap or excess electricity. This includes areas with strong renewable generation or underused energy resources.
This integration creates both opportunities and challenges. On one hand, mining can support energy systems by using power that might otherwise go to waste. It can also provide flexible demand that helps stabilize grids.
On the other hand, it can increase pressure on local electricity supplies and extend the use of fossil fuels if cleaner options are not available.
In the United States, Bitcoin mining could account for up to 2.3% of total electricity demand in certain scenarios. This highlights how quickly the sector is scaling and how closely it is tied to national energy systems.
Energy Markets Are Now Key to Bitcoin’s Future
Looking ahead, the connection between Bitcoin and energy is expected to grow stronger. The network’s computing power, or hash rate, continues to reach new highs, which typically leads to higher energy use.
Electricity will remain the main cost for miners. This means Bitcoin will continue to respond to changes in energy prices and supply conditions. At the same time, governments are starting to pay closer attention to crypto’s environmental impact, which could shape future regulations.

Some forecasts suggest Bitcoin’s energy use could rise sharply if adoption increases, potentially reaching up to 400 TWh in extreme scenarios. However, cleaner energy systems could reduce the carbon impact over time.
Bitcoin is no longer just a financial asset. It is also a large-scale energy consumer and a growing part of the global power system.
As a result, understanding Bitcoin now requires a broader view. Energy prices, electricity markets, and carbon trends are becoming just as important as market demand and investor sentiment.
The message is clear. As energy markets move, Bitcoin is likely to move with them.
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Carbon Footprint
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