BUSINESS NEWS: Governments’ next steps in offshore wind
The federal minister for climate change and energy Chris Bowen has announced proposed locations for offshore wind projects, including offshore near Gippsland and Portland in Victoria, the Hunter and Illawarra in NSW, northern Tasmania and the coastline from Perth to Bunbury in WA.
The federal government estimates an offshore wind industry in Australia would create 3000 to 8000 jobs annually.
Tim Baxter, Climate Council senior researcher and energy expert said this is an important step, but noted that more still needs to be done.
“This is an exciting and critical step in realising a cleaner, cheaper, healthier future that is free of coal and gas. Just like the new Climate Bill and overnight historic proposed rejection of the Queensland coal mine – this announcement is a symbol of Australia’s climate shift – but urgent action to reduce pollution this decade is what matters most.
“While Europe takes great advantage of its offshore wind resources, foot dragging by the previous federal government means Australia – with world class offshore wind resources – still has no industry at all.
“Taking advantage of offshore wind brings many advantages to the grid, further improving the reliability of our power supply. Australians can see the importance of this in the current energy crisis which has been exacerbated by the fleet of failing coal and gas generators.”
Dr Madeline Taylor, Climate Councillor, energy expert and senior lecturer at Macquarie University’s School of Law said: “The mapping of offshore wind zones represents an exciting opportunity and important step forward to harness our excellent offshore wind resources. It also provides a positive market signal for industry and communities.
“Australia’s wind resources are among the world’s best, comparable to the North Sea, an area that’s leading the world in offshore wind generation. In fact, if all of our proposed offshore wind farms were built, their combined energy capacity would be greater than all of Australia’s coal-fired power stations.”
Credit Suisse backs SAF with $100 million in green loans
Sustainable Australia Fund (SAF) will partner with Credit Suisse Group with $100 million in funding committed by the financial services company to help Australian businesses upgrade their buildings to be more sustainable through an upgrade finance debt facility with loan approvals up to $200,000.
Scott Bocskay, chief executive officer of SAF said the funding is “an exciting new step in the growth of financing for green buildings”.
“We are thrilled to work with Credit Suisse to make an even bigger impact in the green loans space. As a specialised non-bank lender, our mission is to support businesses to save money while reducing their environmental footprint. This expanded loan facility allows us to work with even more businesses of all sizes.”
Will Farrant, head of securitised products in the Asia Pacific at Credit Suisse said: “The growth and scale of this innovative asset class is an important step towards unlocking the capital needed to fund energy transition.
Green bonds revive after reaching $417.8b in first half of 2022
Green, social, sustainability, sustainability-linked, and transition (GSS+) labelled debt reached a combined volume of US417.8 billion in the first half of 2022. This is a year-on-year decrease of 27 per cent compared to 2021. However, signs of a revival are now emerging as green issuance picked up by 25 per cent since the first quarter of this year.
Experts attribute the drop to the Russian invasion of Ukraine, the European energy crisis and pandemic-related inflation. Rising interest rates and high volatility resulted in decreased bond issuance, even after the GSS+ have been soaring by 50 percent year-on-year since market inception in 2007.
This data comes as the Climate Bonds Initiative, an international organisation working to mobilise global capital for climate action, released its Sustainable Debt Market Summary.
Climate bonds chief executive officer Sean Kidney said green bonds are “driving a global conversation about the opportunities within climate investments and the mobilisation of capital”.
“Investors now know the future will need to be clean and green; it’s now a question of the speed in getting there and who will be winners in the transition. Issuing a green bond signals transition efforts that reduce the risk of being bowled over by the coming tidal wave of change.”
Xpansiv to acquire environmental commodities broker Evolution Markets
Environmental commodities platform Xpansiv will acquire Evolution Markets, a global broker of carbon, renewable and energy securities. This will bring in more than 2000 customers, including many of the world’s largest energy firms, corporations, utilities, and financial institutions. This comes after its US$400 (A$576.84) million investment from Blackstone and recent acquisition of energy and environment registry APX.
The company helps connect buyers and sellers of environmental commodities, such as carbon offsets, renewable energy credits (RECs), and low-carbon fuels.
Xpansiv president and chief operating officer John Melby said that the acquisition will leverage the company’s environmental and energy market infrastructure, and will bring transparency, scale, and confidence to rapidly growing environmental markets.
Evolution Markets co-founder and executive chairman Andrew Ertel said the acquisition will bolster innovation in market solutions to address climate change. “The global energy transition and increasing corporate ambition to reduce carbon footprints require next-generation market infrastructure, which is what Xpansiv—with the help of Evolution Markets—will deliver.”
Evolution Markets chief executive officer Evan Ard said there is growing demand for trusted, market-based solutions. “By joining Xpansiv, Evolution Markets will be able to continue building its sustainable solutions footprint and environmental and energy markets transaction services, which will better position our clients to compete in a carbon-constrained world.”
Monash wins funding for blockchain technologies in the Pacific
Blockchain technology researchers from Australia and the Pacific led by Monash University, are among 10 winners (and the only Australian winner) of the Algorand Centres of Excellence (ACE) Program, which injects a US$50 (A$72.10) million funding boost to strengthen blockchain technology, education and innovation.
The five-year Sustainability Informatics for the Pacific Project will bring together seven universities and two non-profit organisations across APAC, headed by the Monash Blockchain Technology Centre.
The ACE on Sustainability Informatics for the Pacific Project includes researchers from the University of Queensland, the University of Sydney, Swinburne University of Technology, the University of Fiji, the University of the South Pacific, the Hong Kong Polytechnic University, the Oceania Cyber Security Centre and ClimateWorks Centre.
The ACE Program is an initiative of US-based Algorand Foundation, which aims to increase use of a carbon-negative blockchain invented by Turing Award winner and Massachusetts Institute of Technology professor Silvio Micali.
Associate Professor Joseph Liu, project lead and Monash Blockchain Technology Centre director said the project will deliver sustainable and innovative blockchain technology for the unique communities of the region.
He said the goal is to create “a significant real-world impact in the region built on a foundation of research, education and community-led participation and support”.
“Blockchain technologies can actually be used in diverse sectors such as strengthening renewable energy optimisation, providing a fair platform for carbon trading, creating robust supply chains for food and agriculture, securing financial technologies and ensuring cultural sustainability for heritage art and music.
“As part of the Pacific family, we want to ensure that Australia and the region benefit from the best collaborative research for stronger and sustainable technological resources.”
Super fund divestment in fossil fuels signals shift to steer clear of stranded assets
Industry super fund NGS Super has announced divestment of oil and gas exploration and production companies, including Woodside and Santos, in a bid to reach a carbon neutral portfolio by 2030.
Australians are increasingly looking for greener options when it comes to their super, however Market Forces recently revealed some of these options are failing to live up to their standards and are still investing in fossil fuels.
The superfund, which has over $13 billion in funds under management, is attempting to counteract this by actively restructuring holdings in any company in the oil and gas production and exploration sector, as well as any company that makes 30 per cent or more of revenue from distribution, power generation or extraction of thermal coal.
NGS Super chief investment officer Ben Squires said he expects higher returns for allocating capital elsewhere. The $191 million divestment has been redistributed to other holdings within the fund’s equities portfolio.
“It would be irresponsible to put our members’ financial interests at risk without a portfolio well-positioned for the future. We are striving to replace those companies that have high carbon intensive businesses that are either failing to rapidly decarbonise or unlikely to be able to, with companies that have a clear transition plan to decarbonise.”
“Companies whose revenue relies on further oil and gas exploration and production are at risk of becoming stranded assets as the world decarbonises, especially if they are solely focused on upstream oil and gas production. By divesting these companies, we expect to generate higher returns from allocating capital elsewhere.”
H2EX enters into research agreement with CSIRO
Perth “geologic” hydrogen exploration start-up H2EX has announced it will leverage the research expertise of CSIRO to explore natural hydrogen seeps and migration pathways in South Australia’s Eyre Peninsula.
The project to explore a 5991 square metre site to understand the natural hydrogen system in the area was made possible by CSIRO Kick-Start, an initiative that provides funding and support for Australian start-ups and small businesses to access CSIRO’s research expertise to help grow their business.
H2EX chairman and non-executive director Peter Coleman said: “CSIRO’s leading approach to innovation and technology and proven track record to help commercialise novel ideas makes them the perfect partner for H2EX. There is no question that within Australia and arguably the World, CSIRO is at the forefront of natural hydrogen research and field work.”
Car industry’s secret plan to slow EV’s exposed
In bad news, leaked documents reveal the car industry has waged a secret campaign to put the brakes on Australia’s transition to EVs, a report by The Sydney Morning Herald has revealed.
A lobbying and public relations strategy developed by the Federal Chamber of Automotive Industries widely circulated and shared among top motoring executives, aims to curtail new fuel efficiency rules, and leave Australia with some of the weakest emission standards in the world.
Leaked documents show the plan to allow new passenger cars sold in 2030 to dodge global standards and still emit 98 grams of carbon dioxide per kilometre on average – compared to European specifications that limit emissions to 95 grams per kilometre and ban almost all new petrol and diesel vehicles including hybrids in 13 years.
Falling property activity but rents are tipped to rise
The number of property investors active in the market in June fell 6.3 per cent, according to the latest Australian Bureau of Statistics lending indicators, as Sydney saw the sharpest value falls in almost 40 years, while values in Melbourne, Hobart, Brisbane and regional Australia also dropped last month.
Buyer confidence has fallen, but rents are likely to rise.
Atlas Property Group director Lachlan Vidler said the latest data shows that rapid escalation in interest rates bruised buyer confidence in May and June, which is compounding the critical rental undersupply.
“Investor confidence only started to improve about a year ago, but now that rates are rising and borrowing capacity is being assessed at interest rates well above market projections, many are once again unable to secure finance.
“There does seem like an element of déjà vu to the current lending situation, which unfortunately is likely to intensify the demand and supply imbalance in rental markets around the nation.”