CIBC drives the sustainability agenda

Welcome to the fourth edition of the CIBC Capital Markets Sustainability newsletter.

At CIBC, we are committed to making sustainability a reality for our clients and the communities we serve. We have built a market-leading Renewables franchise to provide our clients with expert advice, capital and access to capital markets in this important sector. Whether through greening your balance sheet or providing sustainability advisory services, our objective is to help our clients become global leaders in environmental stewardship and sustainability. Our bank is committed to supporting $150 billion in environmental and sustainable finance activities by 2027 to support clients in transitioning to a lower carbon economy, and we’re well on our way to achieving this target. 

CIBC hosts inaugural Carbon Capture and Utilization conference

Our capital markets team hosted a conference that provided an overview of the value chain, including macro overview from Global CCS Institute, as well as capture technologies including Mitsubishi Heavy Industries, ION Clean Energy, Svante, and Carbon Engineering. Transportation was covered by Wolf Midstream, and the utilization panel included Denbury, Carbon SAFE and CarbonCure.

Some key facts from the conference highlight the ever increasing need for expanded global focus and advancement with CCUS:

• 100x increase in CCUS required to achieve net zero (from 40mtpa in 2020 to 5,635mtpa by 2050)
• Costs of CCUS are falling $100(CAD) today to $30(CAD) by 2030 as a result of learnings, better tech (solvents/compression methods), economies of scale and modularisation
• North America, in particular the US, is leading the charge but global attention is increasing – particularly in the UK and Norway
• To hear a brief conference wrap-up, please click here.

To learn more about the conference including replay details, please reach out to your CIBC representative.

“Climate change is a threat to our security,” Boris Johnson tells world leaders

On February 23, Boris Johnson hosted the United Nations Security Council meeting. This is the first time a British PM has chaired such a meeting since 1992. Speaking at the start of the meeting, Sir David Attenborough warned that “the world is perilously close to tipping points that once past will send global temperatures spiralling catastrophically higher”. Through the meeting, the UK PM furthered the tone by making his stance on climate change known to the world – calling for urgent action to tackle the growing concern of climate change, risking worsening global conflict, displacement and insecurity if not done.

The UK will host the COP26 climate summit in November this year.

Further details on the United Nations Security Council meeting can be found here.

Ambitious climate pledges make Big Tech (Amazon, Apple, Facebook, Google and Microsoft) the dominant buyers of clean power

Tech groups are the biggest corporate buyers of green energy

Global cumulative offsite power purchase agreements, 2000 to present (MW DC)

In 2020 Amazon was the largest corporate clean energy dealmaker in the US as well as globally.

Clean energy deals and climate goals are now a source of rivalry between the tech companies.

Deal tracker for renewable power purchase agreements by large buyers (GW)

Microsoft has vowed to be “carbon negative” by 2030, which means that it will pull more carbon dioxide from the atmosphere than it emits each year.

Google has pledged to run all of its data centres on carbon-free electricity (such as hydropower, wind and solar) 24/7, by 2030.

Microsoft publishes their lessons from an early corporate purchase of carbon removal

As mentioned above, Microsoft has made some bold commitments to carbon removal, including achieving a carbon negative goal by 2030.

The report describes the request for proposal (RFP) process for carbon removal, which covers short term projects like forest and soil projects, as well as more durable projects such as direct air capture and storage. For any corporate with aspirations to sell credits, this is an excellent point of view from the most mature and sophisticated buyer of carbon credits. The report is aimed at helping to make the market more robust and help create better markets for carbon offtake.

As a further note, Microsoft disclosed its plan of how it would achieve its carbon negative goal by 2030. This is great disclosure that other companies should emulate, in our opinion.

Microsoft’s pathway to carbon negative by 2030

The blackout in Texas

We have all heard a lot about the power outages in Texas and the ensuing impacts to lives and livelihoods. That said, one factoid of interest is the current ‘queue’ for projects into the Electric Reliability Council of Texas (ERCOT) across the Texas market. It is clear that renewables and batteries dominate the project line up, with natural gas far behind.

Similarly, in its latest Annual Energy Outlook, the EIA is projecting that renewables will surpass natural gas as the top source of generation by 2030 and account for 42% (currently ~21%) of the U.S. electricity generation mix by 2050.  

ERCOT Interconnection Queue – July 2020

The commercial seaport along the UK’s southern coastline has announced a partnership with a local start-up to build a 20-megawatt electrolysis plant adjacent to the port’s locks. The hydrogen will be certified as fully green and will be produced from a combination of on-site renewable energy sources at the port and green energy from the grid.Green hydrogen plant to be built in the UK

A recent report by Aurora Energy Research suggests that hydrogen demand could expand from 330 terawatt-hours today to over 2,500 terawatt-hours by 2050.

Additional details on the Green hydrogen plant project can be found here.

CIBC is first Canadian bank to join RMI’s Center for Climate-Aligned Finance

CIBC is proud to join the Center for Climate-Aligned Finance as a strategic partner. The goal of the partnership is to work alongside our clients, particularly those in high-emitting industries, to develop pathways to a net zero carbon future. This includes developing global frameworks and actively driving practical solutions.

CIBC joins partnership for Carbon Accounting Financials

CIBC recently announced the Partnership for Carbon Accounting Financials, or PCAF, an initiative led by the financial industry to develop a harmonized global standard to measure and disclose the greenhouse gas emissions (GHG) of loans and investments.

CIBC related events

Upcoming events

‘Carbon Capture Utilization and Storage (CCUS) and Hydrogen, United Kingdom’ Tuesday April 20, 9:30am EST / 2:30pm GMT.

The event will feature a focus on UK and European developments with CCUS, following our successful North American CCUS conference, February 23. We will also be adding hydrogen as a topic to our UK conference.