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“…Protecting nature makes our business more resilient…”

Nature is no longer a sustainability footnote. It is appearing on risk registers, in investor questionnaires, and in the disclosure rules your reporting teams are preparing for. As CFO, you are increasingly expected to explain how your company identifies, prices, and manages those exposures — and what you intend to do about them.

Nature Based Solutions, often shortened to NbS, have moved from environmental strategy into financial strategy. This guide explains what they are, why they matter to the finance function, and how to evaluate them with the same rigor you apply to any other capital allocation decision.

 

Why Nature Is Now a Financial Exposure

World Economic Forum analysis indicates that approximately $58 trillion — more than half of global GDP — is moderately or highly dependent on nature. When ecosystems degrade, so do the inputs, supply chains, and insurable assets behind much of that revenue.

Capital markets and regulators have taken note. The TNFD 2025 Status Report found that nearly 70% of organizations already face or expect sustainability reporting requirements within the next three years, with Europe and Asia under the greatest short-term pressure. More than half of investors surveyed described themselves as “very concerned” about nature loss and its impact on financial markets, while another 42% were “somewhat concerned.”

The gap between corporate impact and corporate action is also widening. The World Business Council for Sustainable Development reports that roughly $5 trillion in corporate financial flows harm nature each year, while only about $35 billion flows into Nature Based Solutions. That imbalance is becoming a strategic and fiduciary question — not an ESG one.

 

What Nature Based Solutions Actually Are

NbS are actions that protect, sustainably manage, or restore ecosystems to deliver measurable benefits for business, society, and climate. In practice, that looks like mangrove restoration, peatland rewetting, improved forest management, regenerative agriculture, wetland protection, and urban green infrastructure.

For a CFO, the useful characteristic is that well-designed Nature Based Solutions produce multiple returns from a single investment: carbon sequestration, flood and drought resilience, water quality, biodiversity outcomes, and community benefits. The Nature Conservancy notes that companies adopting nature-based solutions often see outsized and longstanding benefits across financial, regulatory, and operational objectives — benefits not typically associated with traditional grey infrastructure.

That stacked value is what makes them financially interesting. It is also what separates high-integrity projects from lightweight offsets.

 

Why the CFO Specifically

Accounting for Sustainability (A4S), the finance-focused initiative established by King Charles III, has been explicit: the finance function is the natural owner of the nature business case. The 2024 A4S Nature Guidance describes nature as the foundation on which all organizations depend to create value, underpinning financial returns, capital markets, and wider economic growth. A companion 2024 briefing by the Cambridge Institute for Sustainability Leadership and A4S places CFOs at the center of aligning strategy, capital allocation, and disclosure with a nature-positive trajectory.

Translated to boardroom concerns, this shows up as:

  • Risk management. Nature-related physical and transition risks convert into operating cost volatility, asset write-downs, and potential liabilities.
  • Cost of capital. Lenders and investors are beginning to price nature exposure into credit and equity decisions.
  • Regulatory readiness. TNFD, CSRD, ISSB, and local equivalents are converging toward integrated climate and nature reporting.
  • Supply chain resilience. Dependencies on water, pollination, and soil productivity are increasingly quantifiable and monitored.
  • Reputation and investor trust. Credibility now requires measurable outcomes, not aspirations.
 

How Nature Based Solutions Connect to Carbon Strategy

Many CFOs first encounter NbS through the carbon strategy discussion. High-integrity nature-based carbon credits — from avoided deforestation (REDD+), reforestation, improved forest management, blue carbon, and regenerative agriculture — can play a defensible role in a net zero plan, alongside deep operational decarbonization.

Used well, they help you:

  • Address residual emissions that cannot yet be eliminated within your operations or value chain
  • Channel finance into the ecosystems your business depends on
  • Produce third-party verified outcomes that stand up to investor and auditor scrutiny
 

Used poorly, they expose you to greenwashing claims, restated reports, and stranded sustainability investments. The difference comes down to project quality, additionality, permanence, methodology, and governance. This is where diligence matters as much as in any other investment decision.

 

A Practical Framework for CFOs

Credible frameworks from the WBCSD, the World Resources Institute, and TNFD converge on a similar sequence. The following steps reflect WBCSD’s NbS Blueprint, which sets out a six-stage process for building business cases for Nature Based Solutions across sectors and biomes, alongside guidance from WRI’s 2025 Financial Sector Guidebook on Nature-Based Solutions Investment and TNFD’s LEAP approach.

  1. Locate exposure. Map where your operations and supply chain depend on or impact ecosystems. Focus first on material sectors and regions.
  2. Quantify the financial impact. Translate those dependencies into cost and revenue scenarios. Nature risk that is not quantified will not be funded.
  3. Prioritize intervention points. Where does an NbS investment protect core enterprise value — a watershed, a coastal asset, a commodity supply shed — rather than simply offsetting unrelated emissions?
  4. Select credible instruments. Options include direct NbS investment, insetting within your value chain, sustainability-linked bonds, blended finance structures, and verified nature-based carbon credits from reputable registries.
  5. Govern for integrity. Define KPIs, reporting cadence, and third-party verification from the start. Align with TNFD, the Science Based Targets Network, and ICVCM Core Carbon Principles where relevant.
  6. Communicate with discipline. Investor-grade language, conservative claims, and clear linkage to enterprise value create durable credibility.
 

The 2025 McKinsey and World Economic Forum report Finance Solutions for Nature identifies ten priority financial solutions — including sustainability-linked bonds, thematic bonds, and internal nature pricing — capable of delivering nature outcomes at scale with investable returns. The point for CFOs is that this market is maturing quickly, and familiar financial structures can now be applied to unfamiliar assets.

 

The Size of the Opportunity

The capital shortfall is also an opening. WRI research indicates that in 2022 only $200 billion was allocated to nature-based solutions globally, with 82% coming from governments; private finance will need to grow significantly to close the gap to an estimated $542 billion per year by 2030. Companies that structure credible NbS strategies now will be better positioned on cost of capital, access to sustainable finance, and customer and regulator trust than those that wait.

This is not a philanthropy line. It is a category of capital allocation that sits squarely at the intersection of risk management, regulatory compliance, and long-term enterprise value.

 

The CFO’s Role From Here

The practical challenge for most finance teams is rarely intent. It is navigating project quality, methodology, and market complexity with the same discipline you apply to any financial decision — and doing so in a reporting environment that is still standardizing.

That is where external expertise matters. Evaluating Nature Based Solutions requires fluency in voluntary carbon markets, project developer diligence, registry standards, accounting treatment, and the evolving disclosure landscape. Few internal teams carry all of that in-house, and the cost of getting it wrong — in reputation, in restated claims, in capital misallocated — is rising.

Carbon Credit Capital works with CFOs, sustainability leaders, and strategy teams to evaluate Nature Based Solutions, structure high-integrity carbon strategies, and align them with credible net zero pathways. We help finance functions apply investment-grade rigor to project selection, portfolio design, and disclosure — so your climate strategy stands up to investor, auditor, and regulator scrutiny.

If you are assessing how Nature Based Solutions and nature-based carbon credits fit into your company’s broader climate and risk strategy, schedule a consultation at CarbonCreditCapital.com to discuss a defensible, commercially grounded plan with our team.

 


Sources

  • Accounting for Sustainability (A4S), Nature Guidance Series: The Business Case for Nature, 2024. accountingforsustainability.org
  • Cambridge Institute for Sustainability Leadership & A4S, Broadening the Horizon: How CFOs and Finance Functions Can Help Drive Corporate Sustainability, 2024. cisl.cam.ac.uk
  • Taskforce on Nature-related Financial Disclosures (TNFD), 2025 Status Report. tnfd.global
  • World Business Council for Sustainable Development, Building Business Cases for Nature-based Solutions (NbS Blueprint), 2024. wbcsd.org
  • World Economic Forum & McKinsey & Company, Finance Solutions for Nature: Pathways to Returns and Outcomes, 2025. mckinsey.com
  • World Resources Institute, Financial Sector Guidebook on Nature-Based Solutions Investment, 2025. wri.org
  • World Resources Institute, How Businesses Can Finance Nature-Based Solutions, 2025. wri.org
  • The Nature Conservancy, The Business Case for Nature-Based Solutions. nature.org

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FIFA World Cup and the 3.7 Million-Tonne Problem: Can Football’s Biggest Event Reduce Its Climate Impact?

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FIFA World Cup and the 3.7 Million-Tonne Problem: Can Football’s Biggest Event Reduce Its Climate Impact?

As FIFA prepares for its upcoming World Cup tournaments from June 11 to July 19, 2026, its climate strategy is facing closer attention, too. The organization has set a goal to reach net zero emissions by 2040. It also aims to cut emissions by 50% by 2030.

These targets are part of FIFA’s long-term sustainability plan, which aligns with the UN Sports for Climate Action Framework and the Paris Agreement. FIFA first announced its climate strategy in 2021 and has since applied it across major tournaments.

However, the challenge is not setting targets. The real challenge is reducing emissions in a global event that depends on international travel. The World Cup is one of the most complex events to decarbonize because most emissions come from sources outside direct control.

FIFA’s Climate Commitments and Official Emissions Targets

FIFA’s climate strategy follows a structured pathway based on global climate standards. It includes measuring emissions, reducing them where possible, and offsetting what remains.

The organization has committed to three main actions:

  • Reduce greenhouse gas emissions by 50% by 2030.
  • Achieve net zero emissions by 2040.
  • Align operations with international climate frameworks.

FIFA reports emissions using standard greenhouse gas accounting. This includes tracking emissions across tournaments, host cities, and operational activities.

FIFA greenhouse gas emissions
Source: FIFA

In past tournaments, FIFA has introduced sustainability measures such as energy-efficient stadiums, waste reduction programs, and public transport planning. For example, several recent World Cup venues have used renewable electricity and modern cooling systems to reduce energy demand.

FIFA also works with host countries to improve infrastructure planning. This includes encouraging the use of existing stadiums and limiting new construction where possible. These steps aim to reduce emissions linked to building materials and long-term infrastructure.

Still, these efforts mainly affect operational emissions. The larger challenge lies beyond stadiums and facilities.

How Emissions Are Measured in the World Cup

FIFA measures emissions using the widely accepted Scope 1, Scope 2, and Scope 3 framework.

Scope 1 emissions come from direct sources such as fuel use in vehicles and on-site operations. Scope 2 emissions come from purchased electricity used in stadiums and facilities. These emissions can be reduced through renewable energy and efficiency improvements.

Scope 3 emissions include all indirect emissions linked to the event. These are the most complex and the largest category.

In the World Cup, Scope 3 emissions come from these sources:

  • International and domestic travel by fans,
  • Team and staff transportation,
  • Accommodation and hospitality services,
  • Supply chains and merchandise production, and
  • Broadcasting and logistics operations.

In large global events, Scope 3 emissions often account for more than half of total emissions. The share is even higher due to the scale of international travel in football tournaments. 

This structure shows that most emissions do not come from FIFA’s direct operations. They come from the wider system that supports the event.

By the Numbers: Inside the 3.7M Ton Carbon Footprint of 2026 World Cup

The FIFA World Cup is one of the largest global sporting events. The 2022 tournament in Qatar drew over 3.4 million spectators, according to FIFA, and reached billions of viewers worldwide. This level of participation creates a large environmental footprint.

For the 2026 FIFA World Cup, hosted by the United States, Canada, and Mexico, total emissions are projected at around 3.7 million tonnes of CO₂ equivalent (CO₂e). This estimate comes from the United 2026 bid’s environmental impact assessment. It reflects the full lifecycle footprint of the event, including travel, operations, and infrastructure.

Fifa world cup 2026 carbon footprint estimates

Transportation is the main driver of these emissions. About 85% of total emissions are linked to travel, especially air travel. This includes both international flights and travel between host cities.

The scale of the 2026 tournament adds to this challenge. It will feature 48 teams, up from 32 in previous editions, and will span multiple countries and cities. This increases travel demand, distances between matches, and overall logistics complexity.

The structure of emissions can be summarized as follows:

  • ~85% from travel-related activities (~3.15 million tonnes CO₂e)
  • ~15% from operations, energy use, and infrastructure (~0.55 million tonnes CO₂e)

Travel emissions alone include:

  • 51% from international journeys
  • 34% from travel between host cities

Compared with more compact tournaments, this format leads to higher emissions due to increased reliance on long-distance flights.

Scope 3 Emissions: The Core Climate Challenge

The emissions profile of the World Cup highlights a clear imbalance. Most emissions fall under Scope 3, which includes indirect sources such as travel, logistics, and supply chains.

Scope 1 and Scope 2 emissions, which cover direct operations and energy use, represent only a small share of the total footprint. These can be reduced through renewable energy and efficient design.

Scope 3 emissions are different. They come from activities outside FIFA’s direct control. These include fan travel, team transport, global logistics, and services linked to the event. This creates a structural challenge. Even if FIFA reduces emissions from stadiums and operations, total emissions can remain high due to travel demand.

Fifa world cup scope 3 emissions

  • In simple terms, the World Cup’s carbon footprint is driven more by movement than by infrastructure.

Scope 3 is also the hardest category to reduce. It depends on global travel patterns, geography, and individual choices. FIFA cannot fully control how fans travel or how often they move between cities.

This is why Scope 3 emissions are central to the climate challenge. They account for the largest share of emissions and the biggest barrier to reducing the World Cup’s overall footprint.

Cuts vs. Credits: The Ongoing Offset Debate

To meet its climate targets, FIFA uses both emissions reduction and carbon offsetting. Reduction focuses on lowering emissions at source. This includes improving energy efficiency, using renewable electricity, and optimizing event operations.

Offsetting is used to balance emissions that cannot be eliminated. This involves investing in projects that reduce or remove carbon emissions elsewhere.

FIFA climate strategies
Source: FIFA

FIFA’s approach includes:

  • Reducing energy use in stadiums and facilities,
  • Increasing the use of renewable electricity, and
  • Supporting carbon offset projects for remaining emissions.

Carbon offsets can include projects such as reforestation, renewable energy development, and carbon capture. However, their effectiveness depends on project quality, verification, and long-term impact.

This has led to debate in climate policy. Some experts argue that offsets should not replace real emissions reduction. Others point out that offsets can support the transition when used carefully.

The key issue is transparency. Clear reporting and verified data are needed to ensure that net-zero claims reflect real outcomes.

Why Net Zero Is Difficult for Mega Sports Events

Mega sporting events like the World Cup have unique challenges. They are temporary, global, and highly mobile. Their emissions come from:

  • International travel,
  • Temporary infrastructure,
  • Large-scale logistics, and 
  • Global audience participation.

Even with strong sustainability measures, these factors create a high baseline of emissions.

Take for example, the Paris 2024 Olympics. The event’s total footprint hit 1.7 million tonnes CO₂e. Travel caused 72%, that’s 1.2 million tonnes, from 720,000+ international visitors. Stadiums run on 100% renewables, but aviation emissions? Untouched.

Super Bowl LIX in 2025 told the same story. The event generated 400,000 tonnes CO₂e, with 85% coming from 150,000+ out-of-state fans flying to New Orleans. The NFL bought 400,000 offsets for carbon-neutral claims. Still, travel cuts? Zero.

mega sporting events emissions

This pattern is industry-wide. Organizers control stadium power. Fans control flights. These mega-events lean on offsets, not aviation reductions. FIFA faces the same problem that other organizers couldn’t easily resolve.

Thus, decarbonization becomes more complex. It also means progress may be slower compared to sectors with more direct control over emissions.

What a Credible Net Zero World Cup Requires

For FIFA’s net-zero goals to be credible, several conditions need to be met.

  • Emissions must be clearly measured and reported across all scopes. This includes full disclosure of total emissions before offsets are applied. Transparency is essential for trust.
  • There must also be a stronger focus on reducing emissions at source. While offsets can play a role, long-term progress depends on real reductions.
  • Independent verification of emissions data can improve credibility. Better coordination of travel and logistics can also help reduce unnecessary emissions.
  • In the long term, advances in low-carbon transport, including sustainable aviation fuels, may help reduce travel-related emissions.

Final Whistle: Can FIFA Turn Climate Targets Into Reality?

FIFA has set clear climate targets, including net zero emissions by 2040. These targets reflect growing pressure on global organizations to reduce their environmental impact.

However, the data shows a clear challenge. Most emissions from the World Cup come from indirect sources, especially global travel. Scope 3 emissions dominate the total footprint and remain difficult to control. This makes them the key factor in any net-zero strategy.

As the World Cup continues to grow in scale, emissions challenges will also increase. Operational improvements can reduce part of the impact, but they cannot fully address the larger system.

The future of football’s climate strategy will depend on how this gap is managed. The goal is not only to set targets, but also to achieve measurable and transparent progress in a global, complex system.

In this field, will FIFA lead or lag? We will watch this space closely.

The post FIFA World Cup and the 3.7 Million-Tonne Problem: Can Football’s Biggest Event Reduce Its Climate Impact? appeared first on Carbon Credits.

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Europe’s Green Shift Hits Overdrive: Robotaxis Launch, EV Sales Surge, Emissions Fall

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Europe’s Green Shift Hits Overdrive: Robotaxis Launch, EV Sales Surge, Emissions Fall

Europe’s climate transition is entering a new phase. In the space of a few weeks, three major developments have emerged across the continent: the launch of the first commercial robotaxi service, a historic surge in electric vehicle (EV) sales, and another drop in carbon emissions under the EU’s flagship trading system.

Each story is different, but together, they point in the same direction. Europe is rapidly reshaping how people move, how energy is consumed, and how emissions are controlled. At the same time, the pace and stability of this transition remain uneven.

Robotaxis Arrive: Europe’s First Commercial Deployment

Europe has officially entered the autonomous mobility era. In Zagreb, the Croatian company Verne launched the first robotaxi service in Europe. This service uses the seventh-generation system from the Chinese firm Pony.ai. The service allows the public to book and pay for fully autonomous rides using the Verne app.

The launch marks a shift from testing to real-world deployment. The service operates in a defined zone of around 90 square kilometers across central Zagreb, including the airport. It runs daily from 7:00 a.m. to 9:00 p.m., according to company disclosures.

The fleet uses Arcfox Alpha T5 electric vehicles, built by BAIC and equipped with Pony.ai’s Gen-7 autonomous driving technology. For safety, trained operators stay in the front seat during this early rollout. The system is fully autonomous for passengers in the back.

Each vehicle carries up to two passengers per trip, reflecting the controlled nature of this early deployment stage.

Verne, a spin-off from Rimac Group, operates the fleet. The company was originally planning a custom-built robotaxi but has now launched using existing vehicle platforms. It has already tested dozens of prototype vehicles and is preparing for scale-up.

This launch is significant for Europe. Until now, autonomous ride-hailing has been largely concentrated in the United States and China. Europe has been slower due to stricter safety rules and regulatory frameworks.

But the commercial rollout changes that narrative. As Verne’s leadership noted, Europe now needs autonomous systems that move beyond pilots into real services.

Expansion is already planned. Partners plan to expand to thousands of robotaxis in over 20 cities worldwide. Uber will also help with future deployments and investment talks. This suggests Zagreb is not the endpoint, but the starting point.

EV Sales Break Records as Fuel Prices Surge

At the same time, Europe’s electric vehicle market is accelerating at an unexpected pace.

In March, the region hit over 500,000 monthly EV sales for the first time. Registrations jumped about 37% from last year, reaching nearly 540,000 units, based on data from Benchmark Mineral Intelligence. The region’s EV sales reached 1.2 million units in the first quarter, up 27% year-on-year.

March-2026-EV-sales europe from BMI

This surge is not happening in isolation. Rising fuel costs are tied to geopolitical disruptions that have increased global oil prices. As petrol and diesel became more expensive, consumers increasingly shifted toward electric alternatives.

The response has been immediate in major markets.

In Germany, the biggest car market in Europe, battery electric vehicle registrations soared 66.2% from last year. In March alone, over 70,000 units were registered, as reported by the Federal Motor Transport Authority (KBA). EVs now account for roughly 24% of all new car registrations in the country, overtaking petrol in monthly sales for the first time.

This is a major shift for a market that struggled just a year earlier. Germany cut subsidies in 2024, leading to a sharp drop in demand. Then, in 2026, it reversed the policy and reintroduced incentives of up to €6,000 for each electric vehicle. At the same time, fuel prices surged. Diesel crossed €2.50 per litre, one of the highest levels on record.

Elsewhere in Europe, similar trends are visible.

The UK saw 86,120 new battery electric vehicle registrations in March. This is a 24.2% increase compared to last year, according to the Society of Motor Manufacturers and Traders. EVs now represent over 22% of the UK market, although still below mandated targets for 2026.

UK EV new registrations
Source: whicheve.net

Across the continent, fuel prices have become a key driver of change. Gasoline prices jumped about 17% in key EU countries. Diesel surged up to 30% in some areas. This followed supply issues tied to geopolitical tensions and unstable oil routes.

Even after oil prices eased from earlier peaks near $120 per barrel, they remain significantly above pre-crisis levels, keeping pressure on consumers.

Online car platforms show how quickly sentiment is shifting. EV searches and inquiries have surged in Germany, the UK, and Spain. This shows a rising consumer urgency, not just slow adoption.

But questions remain about durability. Previous fuel-driven EV surges have faded once prices stabilized. This time, however, structural forces are stronger: tighter EU emissions rules, more affordable EV models, and expanding charging infrastructure are reinforcing demand.

A key economic factor is running cost. In markets like Belgium, driving an EV now costs 45–56% less per kilometre than petrol or diesel vehicles when charged at home.

Emissions Continue to Fall—but Progress Is Uneven

While transport electrification accelerates, Europe’s emissions trend continues downward.

The European Commission reports that emissions under the EU Emissions Trading System (EU ETS) dropped by 1.3% in 2025. This decline continues a long-term trend in the bloc’s industrial and energy sectors.

The EU ETS covers around 45% of total EU greenhouse gas emissions, including power generation, heavy industry, aviation, and maritime transport. It operates under a declining cap system designed to force emissions reductions over time.

Since 2005, emissions in covered sectors have fallen by roughly 50%, placing the EU broadly on track toward its 2030 target of a 62% reduction.

EU EMISSIONS EU net zero
Source: EU

A major driver of recent progress is the power sector. Renewables continue to expand rapidly. Solar generation rose over 20% in 2025. Together, wind and solar made up about 30% of EU electricity. This marked the first time they surpassed fossil fuels in total share.

Overall, renewables supplied roughly 48% of Europe’s electricity in 2025, compared with declining fossil fuel contributions. Coal has seen the sharpest decline, falling to just 9.2% of electricity generation, down from nearly 25% a decade ago.

Europe renewable power capacity forecast 2030

However, the transition is not linear.

Natural gas usage has remained volatile, and in some cases increased, as it continues to play a balancing role in the energy system. Aviation emissions have also risen as travel demand recovered after the pandemic, highlighting one of the hardest sectors to decarbonize.

Carbon markets reflect this mixed picture. EU carbon allowance prices have remained around €70–75 per tonne, supported by steady demand but influenced by shifting energy dynamics.

Eu carbon price april 2026

A Transition Moving at Uneven Speeds

Taken together, these three developments reveal a Europe that is transforming quickly—but not evenly. Robotaxis in Zagreb show how fast mobility innovation is moving when regulation, technology, and investment align.

Record EV sales show how sensitive consumer behaviour is to energy prices, incentives, and infrastructure. And falling emissions show that policy frameworks like the EU ETS are still effective in driving long-term reductions.

But they also show limitations. Electrification is rising, but unevenly across countries. Emissions are falling, but not fast enough in harder sectors like aviation and gas-heavy power systems. And innovation is advancing, but still constrained by regulation and scale.

Europe’s climate transition is no longer theoretical. It is visible in cities, car markets, and industrial emissions data. The path forward may be complex, and there are constraints; still, progress is real.

Europe is not just decarbonizing but is redesigning how mobility, energy, and industry interact. And that process is only just beginning.

The post Europe’s Green Shift Hits Overdrive: Robotaxis Launch, EV Sales Surge, Emissions Fall appeared first on Carbon Credits.

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Rivian (RIVN) and Redwood Deploy 10 MWh Second-Life Battery Storage at Illinois Factory

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American EV maker Rivian and battery recycling leader Redwood Materials are showing how retired EV batteries can do more than power cars. Their new partnership at Rivian’s Illinois manufacturing plant uses second-life batteries as stationary energy storage, creating a model that could support factories, strengthen the grid, and lower electricity costs.

The project starts with more than 100 used Rivian battery packs. Together, they will deliver 10 megawatt-hours of dispatchable energy at Rivian’s Normal, Illinois facility. That stored energy will help the plant reduce electricity use during peak-demand periods, cut costs, and ease stress on the power system.

The numbers behind the opportunity are much larger. The press release reveals that by 2030, the U.S. is expected to need more than 600 gigawatt-hours of energy storage to support rising electricity demand, stabilize peak loads, and power expanding digital infrastructure. Simply put, it is equivalent to the total energy output of the Hoover Dam running continuously for two months.

Rivian Founder and CEO RJ Scaringe said,

“EVs represent a massive, distributed and highly competitive energy resource. As energy needs grow, our grid needs to be flexible, secure, and affordable. Our partnership with Redwood enables us to utilize our vehicle’s batteries beyond the life of a vehicle and contribute to grid health and American competitiveness.”

Second-Life Batteries Move Beyond Recycling

The Rivian-Redwood system gives retired EV batteries a second job before recycling. Redwood will integrate the battery packs into a stationary storage system using its Redwood Pack Manager software. The technology allows batteries with different levels of degradation and chemistries to work together safely.

This is important because EV batteries often remain healthy long after vehicles retire. Many can still serve for years as stationary storage assets. This creates a powerful circular economy model. Instead of going straight to recycling, batteries can generate added value while supporting energy needs.

redwood battery
Source: Redwood Materials

The supply potential is significant. Redwood already receives more than 20 GWh of batteries each year, equal to roughly 250,000 EVs. The company says that by 2030, end-of-life batteries could supply more than 50% of the entire energy storage market.

And this could make second-life batteries a major domestic energy resource.

JB Straubel, Redwood Materials Founder and CEO, also commented on this development. He said,

“Electricity demand is accelerating faster than the grid can expand, posing a constraint on industrial growth. At the same time, the massive amount of domestic battery assets already in the U.S. market represents a strategic energy resource. Our partnership with Rivian shows how EV battery packs can be turned into dispatchable energy resources, bringing new capacity online quickly, supporting critical manufacturing, and reducing strain on the grid without waiting years for new infrastructure. This is a scalable model for how we add meaningful energy capacity in the near term.”

Data Centers Drive Storage Demand

The timing is critical because electricity demand is accelerating.

Artificial intelligence, cloud computing, and hyperscale data centers are pushing power demand sharply higher. Research from the Belfer Center cited,

The Lawrence Berkeley National Laboratory predicts that data center demand will grow from 176 terawatt hours (TWh) in 2023 (or, about 4.4% of total U.S. electricity consumption) to between 325-580 TWh (6.7-12.0%) by 2028.

Secondly, according to the Battery Council International, data center demand is expected to quadruple by 2030, again driven by AI and cloud computing. This surge is one reason stationary battery systems are becoming essential.

BESS

Battery Energy Storage Systems, or BESS, help store electricity and release it when demand spikes. They support peak shaving, frequency regulation, microgrids, and backup power.

Uninterruptible Power Supply (UPS) systems play a different role. They provide immediate short-term power support for critical systems such as data centers, telecom networks, and emergency infrastructure, where even brief outages can cause major disruption.

Together, UPS and BESS are becoming critical to keeping digital infrastructure running.

Market Size

Speaking about market size, the global commercial and industrial battery energy storage market is forecast to reach $21 billion in value by 2036, driven by AI-fueled data center construction, according to research from Globe Newswire.

This is where the Rivian-Redwood model becomes useful. It connects second-life batteries to one of the fastest-growing needs in the energy system. The modular structure of repurposed battery systems may also allow faster deployment than traditional infrastructure, which can take years to build.

Circular Economy Meets Energy Security

The project also supports energy security. Using domestic battery assets for storage can reduce dependence on imported energy storage systems. It may also help defer billions of dollars in grid infrastructure upgrades. This is vital when the U.S. is looking for ways to expand electricity capacity faster.

Second-life batteries can also help during high-stress events. During heat waves or peak demand events, stored energy can be discharged instantly to reduce strain on the grid and avoid buying higher-cost electricity.

It creates economic and reliability benefits at the same time.

The partnership also shows how batteries are evolving from transportation assets into broader infrastructure assets. And this shift can have wide implications for manufacturing, utilities, defense facilities, and digital infrastructure.

Market Competition and Technology

Redwood faces competition from established players in the energy storage market. Tesla has been running Megapack as a first-life business, while Redwood is building a parallel market in second-life batteries.

The Redwood Pack Manager technology acts as specialized software that enables battery packs with different degradation levels and chemistries to work together safely. This capability is crucial for second-life applications where batteries have varying performance characteristics.

Second-life batteries are gaining traction in industrial applications. Battery costs have fallen to historic lows, making these projects increasingly viable economically.

A Blueprint for the Next Phase of Clean Energy

Rivian and Redwood’s 10 MWh deployment represents a practical solution to two major challenges: managing retired EV batteries and meeting surging industrial energy demand. The project demonstrates how automakers can extract additional value from their battery investments while supporting grid stability.

As AI-driven electricity demand continues climbing and EV adoption accelerates, second-life battery projects could become standard practice across the automotive industry. The success of this Illinois pilot may influence how other manufacturers approach end-of-life battery management, creating a new revenue stream while supporting America’s clean energy transition

This project suggests one answer is to connect those two problems. Old EV batteries can become new energy infrastructure.

The post Rivian (RIVN) and Redwood Deploy 10 MWh Second-Life Battery Storage at Illinois Factory appeared first on Carbon Credits.

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