Peak China?

Hey there,

Hope it was a great week. Today we’ll discuss a hot topic from this week: Are Chinese emissions close to peaking? New research suggests so. 

That’s good news! (and worth evaluating with healthy skepticism). Lots of pretty charts and visualizations included throughout as usual, too. 

From there, we’ll round up the week in climate tech funding and headlines. 

One logistical note – we’ll see you again on Wednesday next week rather than Thursday (Thanksgiving). There’s a lot to be thankful for in climate, which we’ll discuss.

In today’s email:

• Peak China?

• Climate tech fundraising announcements 

• Climate tech and energy headlines

DEEP DIVE

Hold on to your seats here folks, new modeling and research suggest Chinese emissions may peak as early as 2024. That’s good news!

Chinese greenhouse gas emissions – spanning the power sector, transportation, agriculture and other sectors – first surpassed U.S. emissions in 2008. 

In the intervening fifteen years, the gap has widened. China is far and away the world’s largest emitter. It emits ~10B+ tonnes of CO2e each year, more than 25% of global emissions.

Of course, more than 1.4B people also live in China (~18% of the global population). At least in 2011, the modal human being was a 28-year old Chinese man. That probably hasn’t changed much since then. 

Further, the Chinese standard of living has improved significantly over the past two decades alone (which no one should begrudge them), meaning they consume more power, meat, and other emissions-intensive products and services.

All of the above effectively is to say, I was surprised to see new research this week that forecasts Chinese emissions may peak as early as 2024. Let’s explore it.

Peak China?

Here’s the skinny on the research. Lauri Myllyvirta, a lead analyst at the Centre for Research on Energy and Clean Air, published analysis in CarbonBrief that forecasts Chinese emissions may actually start to fall structurally – which is to say consistently – as early as next year 2024.

Here’s more directly from the CarbonBrief piece:

There’s a lot at play here. First, it’s worth noting that China’s grid, even in 2023, is very ‘dirty.’

Still, China is also trouncing every other country in deploying low-carbon energy. This will help shift the grid mix pictured above over time. In 2050, China’s pie chart will feature a lot more yellow and light green than it does today.

Here’s more on Chinese renewable deployment. The U.S. is getting crushed!

The same is also true of nuclear deployment. China is building more nuclear reactors than any other country, by a wide margin. Of all reactors under construction globally, more than a third are in China.

Notably, Chinese emissions are not poised to peak because China’s population also appears it may peak soon or have peaked. While its population may indeed have peaked, per capita emissions could continue to rise as the standard of living continues to improve (including energy use per person).

To reiterate, the rate at which China is deploying low-carbon energy is the key lever here.

Healthy skepticism

Still, there are plenty of reasons that the conclusions drawn in this research surprise me. China is famously adding more coal power plants than the rest of the world combined. 

These coal plants are not designed to run all the time; they support manufacturing processes that require heat or serve as back-up generators for the grid, enhancing the country’s overall energy resilience and independence.

Still, as demand for steel for EVs, solar cells for photovoltaics, and battery materials for EVs explodes globally (and buoys all of our energy transition ambitions), a lot of those materials are processed in China, and no small part of how that work gets done depends on burning coal.

As you can see below, Chinese coal consumption isn’t falling; it’s growing about as fast as wind or solar.

I would love for Lauri Myllyvirta and team to be right.

I also know what this might start to sound like. An expert researcher has done 100,000x more research than I. And yet, I question.

I’m not questioning the results or the research. I’m just a touch skeptical. Call it cautious optimism. Maybe I just don’t want to get hurt if this doesn’t come to bear in 2024. Because it really would be good news.

I will say, there’s a long history of being rightfully skeptical of financial data that comes out of China. We can and probably should apply the same rule to some of its environmental data.

The net-net (tl;dr)

As important as it is that China, and the rest of the world, hit peak emissions, peak emissions still aren’t the same as, well, no emissions. Yes, that’s tautological, but it’s worth restating, because I think sometimes we lose sight of it. Even if 2024 is the first year in which Chinese emissions reverse course, it will still have 10B+ tonnes of annual emissions it needs to tackle and mitigate. 

And, even as Chinese emissions may fall, other areas of the world with an exploding population and that are still earlier in their growth curves around electricity access, energy demand, and standard of living, whether you take India or Africa, might see their emissions continue to rise for some time.

To close, three things are true for me here:

• What’s fantastic: Chinese emissions may peak in 2024. 

• What’s realistic: Even post-peak, it will take 50-100 years for China to hit 0 emissions.

• Non-duality: Based on both of the above, we can simultaneously be optimistic, skeptical, and motivated to accelerate change more quickly. 

DEAL HEAT

Large funding rounds

🚗 Divergent Technologies, based out of Los Angeles, raised $230M in equity funding for its automotive design and 3D printing company. Hexagon AB led. More here. (U.S., Industry)

🌞 Huasun Energy, based out of Hefei, China, raised ~$276.3M in Series C funding for its solar module and solar cell manufacturing and technology company. China Green Development Investment Group led. More here. (China, Energy)

♻️ DataBeyond Technology, based out of Guangdong, China, raised $100M in Series B funding for its “AI-based optical sorting” technology and equipment designed to improve recycling. Sequoia China led. More here. (China, Materials)

🔋 Element Energy, based out of Menlo Park, CA, raised $73M in Series B funding for its battery management startup that monitors battery performance across both first and second-life batteries in commercial and industrial settings. Cohort Ventures and an undisclosed clean energy company co-led. Element Energy also secured a $38M debt facility from Keyframe Capital Partners. More here. (U.S., Energy)

⬇️ Deep Sky, based out of Montreal, raised ~$54.8M in equity funding to buy CO2 removal technologies from different companies and centralize them into a research facility. Brightspark Ventures and Whitecap Venture Partners co-led. More here. (Canada, Carbon Removal)

Medium-sized funding rounds

🌞 Otovo, based out of Oslo, raised ~$42.8M for its rooftop solar and battery energy storage business. Å Energy, Axel Johnson Group, and Nysnø, Norway’s climate investment fund, led. More here. (Norway, Energy)

🚲 Upway, based out of Gennevilliers, France, raised $30M in Series B funding for its used e-bike marketplace. The company refurbishes and resells second-hand electric bicycles. Korelya Capital led. More here. (France, Transportation)

💸 Tenet, based out of New York City, raised $10M In Series A funding for its software that links EV buyers with financing providers. It is now expanding beyond loan servicing into energy management as well. Nyca Partners led. Tenet also closed a $20 million warehouse debt facility with Silicon Valley Bank to facilitate the EV loans. More here. (U.S., Financing)

🚢 Switch Maritime, based out of Jackson, WY, raised $10m in Series A funding to develop lower-carbon ferries. Nexus Development Capital led. More here. (U.S., Transportation)

Smaller funding rounds

🚢 Zero Emission Industries, based out of San Francisco, raised $8.75M in Series A funding to develop its hydrogen-focused solutions to decarbonize maritime transportation. Chevron New Energies led. More here. (U.S., Transportation)

🦠 Solar Foods, based out of Helsinki, Finland, raised ~$8.7M in Series B funding to use electricity, air, and fermentation to grow its single-cell protein, SoleinTM. Springvest Oyj led. More here. (Finland, Food & Agriculture)

👚 SuperCircle, based out of New York, raised $7M in pre-Series A funding for its textile recycling logistics platform. Radicle Impact and Ulu Ventures co-led. More here (paywall). (U.S., Industry)

⚡ Optiwatt, based out of San Francisco, CA, raised $7M in Series A funding for its energy optimization app that eases grid demand and saves consumers money by making electricity data more transparent and gets them paid by utilities to shift demand. More here. (U.S., Energy)

🧪 OCOchem, based out of Richland, WA, raised $5M in seed funding to upcycle CO2 into fuels and chemicals. TO VC led. More here. (U.S., Industry)

🔌 Evenergi, based out of Sydney, Australia, raised $5M in equity funding to help transit agencies and other vehicle fleets electrify. Aligned Climate Capital led. Evenergi is targeting a total of $10M for its round. More here. (Australia, Transportation)

🔥 Efenco, based out of Tallinn, Estonia, raised ~$4.9M for its technology that uses cold-plasma-assisted combustion technology to improve the combustion efficiency of natural gas and hydrogen. The funding consists of $1.4M in equity funding, led by Ivo Remmelg via EstBAN Syndicate, and ~$3.5M in grants from the European Innovation Council and Estonia’s Archimedes Foundation). More here. (Estonia, Industry)

🦐🍄 TômTex, based out of Brooklyn, raised $4.15M in seed funding to make textile materials from shrimp shells and mushrooms and replace animal and plastic-based materials. Happiness Capital led. More here. (U.S., Materials)

⚡ Leap, based out of San Francisco, raised $4M in extended Series B funding for its virtual power plant platform. Presidio Ventures led. Leap’s total Series B is now $16M. More here. (U.S., Energy) 

🔌 Beev, based out of Paris, raised ~$3.2M in funding to lease EVs to individuals and businesses. Founders Future, Karista, and others invested. More here. (France, Transportation)

🌊 Mocean Energy, based out of Edinburgh, Scotland, raised ~$2.7M to continue developing its wave energy technology. Equity Gap, Scottish Enterprise, Old College Capital, Katapult Ocean, and MOL Plus invested. More here. (Scotland, Energy)

⬇️ Rewind, based out of Tel Aviv, Israel, raised an additional $1M in seed funding from the Israeli Government Innovation Fund “to restore the earth's carbon balance by storing organic carbon in anoxic water.” Specifically, the v1 of this involves taking biomass from farm and timber harvests and sinking it to the bottom of the Black Sea for sequestration. It also raised $250,000 in research grants from Frontier. Rewind’s total seed round now nets $5M. More here. (Israel, Carbon Removal)

🧪 Methylennium Energy, based out of Falls Church, VA, raised an undisclosed amount of funding to make carbon-free methanol. The Process Group invested. More here. (U.S., Industry)

Other funding rounds

In private equity funding and corporate rounds: 

🌞 DSD Renewables, based out of Schenectady, NY, raised $250M from Cox Enterprises for its solar development business. DSD Renewables has developed 600 MW of solar projects for companies and communities across the U.S. More here. (U.S., Energy)

💦 Cambrian Innovation, based out of Petaluma, CA, raised $200M from Pennybacker Capital Management for its wastewater treatment, water reuse, and energy recovery-as-a-service business. More here. (U.S., Industry)

✈️ SkyNRG, based out of Amsterdam, Netherlands, raised ~$190M from Macquarie Asset Management to produce sustainable aviation fuel. More here. (Netherlands, Transportation)

In acquisitions:

🔋 Volvo will acquire the battery business from Burlingame, CA-based EV company Proterra for $210M. Proterra went bankrupt earlier this year. More here. (U.S., Transportation)

In project and debt financing:

⚡ Madison Energy Infrastructure, based out of New York City, raised $450m in debt funding for its clean energy development and asset operation business. Fifth Third Bank, Natixis, Société Générale, BNP Paribas, TD Bank, Siemens Financial Services, and Forbright Bank participated. More here. (U.S., Energy)

🔋 Northvolt, based out of Stockholm, raised $150M in convertible debt funding from CDPQ to build its ‘Northvolt Six’ battery manufacturing facility in Québec. More here. (Sweden, Industry)

🔌 Revolv, based out of San Francisco, raised $25M in equity project financing to act as a full-service provider of electric commercial fleets. Greenbacker Capital Management provided the sustainable infrastructure investment vehicle. More here. (U.S., Transportation)

In grant funding:

♨️ Antora Energy, based out of Sunnyvale, CA, received more than $4M in grant funding from the California Energy Commission to scale up its thermal energy storage technology. More here. (U.S., Energy)

🚌 BasiGo, based out of Nairobi, Kenya, raised $1.5M in grant funding from the U.S. Agency for International Development to bring more efficient and electric public transportation to Rwanda. More here. (Rwanda, Transportation)

Elsewhere:

🚀 Lockheed Martin, based out of Bethesda, MD, received a $33.7M contract from The U.S. Air Force Research Laboratory to develop nuclear power and propulsion technologies for spacecraft. More here. (U.S., Transportation)

New funds

🐙 Octopus Energy, based out of London, launched a ~$3.7B fund alongside Tokyo Gas to invest in offshore wind projects globally. This comes as the global offshore wind industry is facing significant headwinds. More here (paywall). (U.K., Energy)

💵 TPG, based out of San Francisco, closed its third ‘Rise’ climate fund with $2.7B in capital commitments. More here (paywall). (U.S., Funds)

💰 SWEN Capital Partners, based out of Paris, closed its second impact fund to the tune of $630M. It plans to invest in renewable natural gas projects. More here (paywall). (France, Funds)

💰 Material Impact, based out of Boston, raised $352M for its third fund to invest in material sciences companies. More here (paywall). (U.S., Funds)

💰  MOL Switch, a new U.S.-based company formed by Japanese conglomerate Mitsui O.S.K. Lines, raised $100M to invest in startups developing decarbonizing technologies in the energy sector over the next 3 years. The new company was formed in May but only announced recently. More here. (U.S., Funds)

💰 Supernova Invest and Crédit Agricole Group, both based out of Paris, raised ~$65M in the first close of a planned ~$108M agtech fund. More here. (France, Funds)

💰  Fortescue, an Australian metals and mining giant, is setting up a new fund, Fortescue Capital, which will be based out of New York, to invest in green hydrogen and green ammonia projects globally. More here. (Australia / U.S., Funds)

ELSEWHERE IN CLIMATE AND CLIMATE TECH

💸 Federal funding: The feds were busy! Here’s what the DOE announced this week.

• $3.9B via the Grid Resilience and Innovation Partnerships program to make investments in improving and upgrading the grid nationally to make it more resilient to climate change.

• $3.5B from the Bipartisan Infrastructure Law to boost domestic production of advanced batteries and battery materials. The funds will be administered by the DOE’s Office of Manufacturing and Energy Supply Chains.

• $2B via the EPA’s Environmental and Climate Justice Community Change Grants program to invest in local environmental justice projects across the country.

• $444M from the Bipartisan Infrastructure Law for 16 projects (across 12 states) that will advance the U.S.’s CO2 management, transport, and storage infrastructure.

• $300M via the Federal Emergency Management Agency’s Swift Current Initiative for flood resilience and infrastructure investments nationally. 

• $44M from the Frontier Observatory for Research in Geothermal Energy for 13 research projects designed to further develop and research enhanced geothermal energy technologies and innovation. 

• $40.8M via the Bipartisan Infrastructure Law to expand training opportunities for energy transition jobs. The money will be spread across 17 new ‘Industrial Assessment Centers’ and 10 ‘Building Training and Assessment Centers.'

• $31M via the Energy Efficiency and Conservation Block Grant to fund low-carbon energy and infrastructure upgrades by state governments, local governments, and Puerto Rico. 

Outside the U.S., the European Commission signed off on ~$1.85B in grants and subsidies to deploy ~1 GW of new agrivoltaic projects (combine solar + agriculture) in Italy.

⛏️ Breaking ground: Hyundai Motor recently broke ground on its $1.5B EV manufacturing plant in South Korea. The company aims for the plant to have enough capacity to produce 200,000 vehicles annually, with mass production beginning in the first quarter of 2026.

🚧 Notice to proceed: Rivian also gained approval this week to start construction on a new $5B manufacturing plant outside of Atlanta, Georgia, to make more EVs.

🔌 Electrification: Exxon plans to start producing lithium for EV batteries in 2027 in Arkansas. By 2030, they aim to provide enough lithium for over 1M EV batteries annually. Back in May, Exxon paid $100M+ for mineral rights on 120,000 acres in Arkansas featuring a geologic formation rich in subsurface brines. Exxon notes it plans to use direct lithium extraction, i.e., it will use solvents and / or membranes and filters to extract lithium from brine. 

📈 DAC scale-up: Frontier, the massive advance market commitment including corporate buyers such as Google and Meta, made some of its first carbon removal credit purchases this week. Signed deals included $20M for the removal of 45,500 tons of CO2 by 2028 from CarbonCapture and $26.6M for the removal of 26,900 tons of CO2 by 2030 from Heirloom.

🗳️ P.S. – a call to action for carbon removal peeps: If you’re a carbon removal buyer or supplier, take this survey from cdr.fyi! I trust it will be valuable data that they’ll share transparently.

✈️ Innovation: Elroy Air, based out of San Francisco, completed what it claims is the first flight of a ‘turbogenerator-hybrid VTOL’ aircraft. 

🥊 On strike no more: UAW members approved a new contract with Ford, Stellantis, and GM (the “Big Three”), formally ending a strike saga that threatened to derail progress on EV manufacturing. 

📉 Not all roses: Li-Cycle, a battery recycling company based out of Toronto, hired Moelis, an investment bank known for recapitalizations and restructurings, to explore strategic alternatives. All of that is roughly jargon for “our business is in deep trouble.”

Arrival, a once-hyped urban utility EV startup, is also raising capital to try to survive long enough to sell itself. 

Hydrogen and fuel cell developer Plug Power also issued a going concern notice, which is another jargony way of saying, “Our business may not survive if things don’t improve soon.”

🚫 so good news: More headwinds for the offshore wind are mounting. This week, Ørsted pulled out of a Norwegian offshore wind consortium, while multiple Japanese companies pulled out of offshore wind projects in the Taiwan Strait. That said, as noted above, Octopus Energy, a massive U.K. energy company, launched a ~$3.7B fund to invest in offshore wind projects globally. For more on headwinds in offshore wind and wind energy in general, you can dive deeper from us here. 

🌞 Closing on good news: The UAE accomplished two cool things this week. First, project developers finalized the 2 GW (!) Al Dhafra solar farm, which is one of the world’s largest solar farms with more than 4 million solar panels. Abu Dhabi Future Energy Company, Abu Dhabi National Energy Company, EDF Renewables, and JinkoPower jointly developed the project.

The UAE’s Federal Authority for Nuclear Regulation also granted an operating license for the fourth and final reactor at the Barakah Nuclear Power Plant, also located in the Al Dhafra region of Abu Dhabi. The Barakah Nuclear Power Plant will feature 5.38 GW nameplate capacity, sufficient to provide about a quarter of the UAE’s electricity needs.

Happy Thanksgiving week to all who celebrate,

– Nick

P.S., hungry for more good climate tech content? Here’s one recco: