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Absolute Climate wants to grade all carbon credits the exact same way.
In the wake of a wave of scandals in the carbon credit market, a boatload of brokers arrived to mediate between buyers and sellers and improve the integrity of carbon claims. In came the consulting firms staffed by scientists to advise companies on which credits to buy, ratings agencies to assess individual carbon projects, and carbon credit registries with new business models that promised to be more scrupulous than those that came before.
But to Peter Minor, none of these players is getting at the root issue. So Minor, an alum of the carbon removal advocacy group Carbon180, is launching his own company, Absolute Climate, to solve what he sees as the two biggest problems in the carbon credit market: inconsistent accounting and conflicts of interest.
“If we don’t fix these things, the carbon removal industry may never get to the trust and adoption that it’s going to need to get to enough scale to actually reduce harms,” Minor told me.
Absolute Climate’s solution is a new standard, or set of rules, for accounting for the climate benefits of carbon removal projects that would ensure carbon credits from different projects are comparable on an apples to apples basis. That is, as long as it’s widely accepted by a market that’s fraught with divisions.
To date, the registries — the businesses that certify and sell carbon credits — have been the ones to create and oversee accounting standards. But the registries have an incentive to set permissive requirements, Minor said, because the more credits they certify, the more they can sell. This arrangement has resulted in standards that all use slightly different criteria to account for how much carbon has been removed. These differences show up not just across registries, but also within registries across different types of projects.
Here’s an illustrative example: Climeworks is a company that builds industrial-scale plants to suck carbon out of the air, compress it, and inject it underground. Under the carbon removal registry Puro’s standard, Climeworks must take into account the emissions related to clearing the land, building the plant, powering it, transporting the captured carbon, and injecting it before coming up with the net total tons of carbon the plant has removed and the number of credits the company can sell.
Compare that to Red Trail Energy, which owned a corn ethanol refinery and recently began capturing carbon emitted from the facility’s fermentation tank and injecting it underground. Corn absorbs carbon from the atmosphere as it grows, and Red Trail puts away some of that carbon permanently. But to calculate how many carbon removal credits Red Trail can sell based on this project, Puro does not require the company to account for the emissions associated with growing the corn, transporting it to the plant, or heating it up using a natural gas boiler. Nor does it require measurement of the emissions released when the ethanol is burned in a vehicle. If it did, all those emissions would exceed the amount of carbon Red Trail is storing.
On the Puro registry, Climeworks’ credits and Red Trail’s credits are identical, both advertised as carbon removal. But to Minor, the credits are fundamentally different — one is a truly net-negative process, the other reduces emissions to the atmosphere from an existing source. Once the world has cut carbon nearly to zero, only the first project could provide a counterweight to any residual emissions and help halt or even reverse warming. Minor worries that if both are called carbon removal, the difference won’t be clear until it’s too late.
“We might get to the point where we’ve scaled up the infrastructure and the political economies around certain projects because they were cheaper or more efficient in our minds, but actually it’s just that they weren’t net-negative,” he said. “So we may put ourselves in a position where we can’t actually meet our climate goals.”
Minor is not alone in this concern. Several recent peer-reviewed papers have identified this as a pervasive issue and proposed ideas for how to solve it. “Big picture, we want net flux of carbon out of the atmosphere into storage,” Anu Khan, founder of the non-profit Carbon Removal Standards Initiative, told me. “We want to set rules that motivate this and allow us to add it up over time.”
Absolute Climate’s solution is based on a framework developed by scientists from Lawrence Berkeley National Laboratory. Minor described it as a single standard that verifiers can apply in exactly the same way to every method of carbon removal and determine whether a given project is net-negative or not. Each type of carbon removal, like enhanced rock weathering or direct air capture, will still require individualized rules for how it should conduct physical measurements, he said. But the project scope — the question of what to measure — will be consistent.
In practice this doesn’t seem like a major paradigm shift. It requires project developers to identify all the activities associated with their project that either release or store carbon, measure each one, and add them together to get the net result. The main difference is that they can’t selectively ignore certain emissions in the calculation if, for example, those emissions are related to a co-product like ethanol.
To meet Absolute’s standard, a project must also be able to store carbon for 1,000 years, similar to the amount of time carbon emissions stay in the atmosphere. That’s in contrast to most standards, which have different requirements depending on the project type. For example, reforestation and soil carbon storage projects typically only have to store carbon for 100 years, while any project injecting carbon underground has to promise 1,000 years.
Any carbon credit registry can adopt the standard, and the company will earn a fee for each project certified under it, rather than for the number of credits certified. One registry, called Evident, which sells renewable energy credits, has already agreed to use it.
But it’s hard to imagine other registries that have invested significant time into developing standards — and certified credits using them — throwing those out anytime soon. When I wrote about the questions raised by the Red Trail Energy project earlier this year, Puro defended its rules. Marianne Tikkanen, Puro’s co-founder and head of standards, said the point of carbon credits is to pay for an intervention that wouldn’t have happened otherwise. In this case, that meant it was appropriate to isolate the carbon capture and storage part of the project when it came to certifying credits, she said.
Adding yet another layer between buyers and sellers could also increase costs. “There are market pressures that drive towards vertical integration of registries that do everything,” Khan told me. “Cost savings are a really big deal. Companies want to buy credits at the lowest cost that is good enough for the type of claim that they want to make.”
Absolute will face competition, both in the literal market and in the marketplace of ideas, from Isometric, a registry my colleague Katie Brigham wrote about earlier this year. Isometric has tried to address the conflict of interest problem by charging fees to buyers — not sellers — for verifying carbon credits.
In setting such a high bar, Absolute also risks having a chilling effect on the carbon removal industry by blocking promising projects that are working through yet-unproven science or have other early-stage growing pains from a key source of funding. As a solution, Absolute plans to designate some projects as part of an “innovative class.” One example Minor gave me is a new direct air capture company that can’t procure enough renewable energy to power its pilot plant and has to run using dirty power. “We can allow them to take those shortcuts where it makes sense, assuming their buyers or the governments that they’re delivering to are okay with that, but we’re going to be transparent about it,” he said.
In short, there will be two classes of credits under the Absolute standard — those that really, definitely, represent carbon removed from the atmosphere, and those that may or may not but support projects that maybe one day could.
This is all a lot to make sense of, and it’s possible Absolute could introduce more confusion into the market with all these new terms and definitions.
“This is most valuable, I think, for those people who care about whether or not what they are investing in can play that future role of being actual carbon removal,” Corinne Scown, a scientist at Lawrence Berkeley National Laboratory whose work influenced the Absolute standard, told me. But for those who just want to fund projects that help fight climate change, the distinction matters less, she said. “Mitigation is still really valuable. We do want people to have a way to pay for that.”
While there are some companies trying to do the former, most are aiming mainly to reduce the amount of emissions on their annual sustainability reports. Today, these reports are voluntary and companies can use whatever math suits them. But soon they will be required by governments such as the European Union and the state of California, which will have rules about how companies should calculate their carbon footprints. Depending on how those rules are implemented, the distinction between an Absolute-certified carbon credit and a Puro-certified carbon credit could matter a great deal.
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Ecolectro, a maker of electrolyzers, has a new manufacturing deal with Re:Build.
By all outward appearances, the green hydrogen industry is in a state of arrested development. The hype cycle of project announcements stemming from Biden-era policies crashed after those policies took too long to implement. A number of high profile clean hydrogen projects have fallen apart since the start of the year, and deep uncertainty remains about whether the Trump administration will go to bat for the industry or further cripple it.
The picture may not be as bleak as it seems, however. On Wednesday, the green hydrogen startup Ecolectro, which has been quietly developing its technology for more than a decade, came out with a new plan to bring the tech to market. The company announced a partnership with Re:Build Manufacturing, a sort of manufacturing incubator that helps startups optimize their products for U.S. fabrication, to build their first units, design their assembly lines, and eventually begin producing at a commercial scale in a Re:Build-owned factory.
“It is a lot for a startup to create a massive manufacturing facility that’s going to cost hundreds of millions of dollars when they’re pre-revenue,” Jon Gordon, Ecolectro’s chief commercial officer, told me. This contract manufacturing partnership with Re:Build is “massive,” he said, because it means Ecolectro doesn’t have to take on lots of debt to scale. (The companies did not disclose the size of the contract.)
The company expects to begin producing its first electrolyzer units — devices that split water into hydrogen and oxygen using electricity — at Re:Build’s industrial design and fabrication site in Rochester, New York, later this year. If all goes well, it will move production to Re:Build’s high-volume manufacturing facility in New Kensington, Pennsylvania next year.
The number one obstacle to scaling up the production and use of cleaner hydrogen, which could help cut emissions from fertilizer, aviation, steelmaking, and other heavy industries, is the high cost of producing it. Under the Biden administration, Congress passed a suite of policies designed to kick-start the industry, including an $8 billion grant program and a lucrative new tax credit. But Biden only got a small fraction of the grant money out the door, and did not finalize the rules for claiming the tax credit until January. Now, the Trump administration is considering terminating its agreements with some of the grant recipients, and Republicans in Congress might change or kill the tax credit.
Since the start of the year, a $500 million fuel plant in upstate New York, a $400 million manufacturing facility in Michigan, and a $500 million green steel factory in Mississippi, have been cancelled or indefinitely delayed.
The outlook is particularly bad for hydrogen made from water and electricity, often called “green” hydrogen, according to a recent BloombergNEF analysis. Trump’s tariffs could increase the cost of green hydrogen by 14%, or $1 per kilogram, based on tariff announcements as of April 8. More than 70% of the clean hydrogen volumes coming online between now and 2030 are what’s known as “blue” hydrogen, made using natural gas, with carbon capture to eliminate climate pollution. “Blue hydrogen has more demand than green hydrogen, not just because it’s cheaper to produce, but also because there’s a lot less uncertainty around it,” BloombergNEF analyst Payal Kaur said during a presentation at the research firm’s recent summit in New York City. Blue hydrogen companies can take advantage of a tax credit for carbon capture, which Congress is much less likely to scrap than the hydrogen tax credit.
Gordon is intimately familiar with hydrogen’s cost impediments. He came to Ecolectro after four years as co-founder of Universal Hydrogen, a startup building hydrogen-powered planes that shut down last summer after burning through its cash and failing to raise more. By the end, Gordon had become a hydrogen skeptic, he told me. The company had customers interested in its planes, but clean hydrogen fuel was too expensive at $15 to $20 per kilogram. It needed to come in under $2.50 to compete with jet fuel. “Regional aviation customers weren’t going to spend 10 times the ticket price just to fly zero emissions,” he said. “It wasn’t clear to me, and I don’t think it was clear to our prospective investors, how the cost of hydrogen was going to be reduced.” Now, he’s convinced that Ecolectro’s new chemistry is the answer.
Ecolectro started in a lab at Cornell University, where its cofounder and chief science officer Kristina Hugar was doing her PhD research. Hugar developed a new material, a polymer “anion exchange membrane,” that had potential to significantly lower the cost of electrolyzers. Many of the companies making electrolyzers use designs that require expensive and supply-constrained metals like iridium and titanium. Hugar’s membrane makes it possible to use low-cost nickel and steel instead.
The company’s “stack,” the sandwich of an anode, membrane, and cathode that makes up the core of the electrolyzer, costs at least 50% less than the “proton exchange membrane” versions on the market today, according to Gordon. In lab tests, it has achieved more than 70% efficiency, meaning that more than 70% of the electrical energy going into the system is converted into usable chemical energy stored in hydrogen. The industry average is around 61%, according to the Department of Energy.
In addition to using cheaper materials, the company is focused on building electrolyzers that customers can install on-site to eliminate the cost of transporting the fuel. Its first customer was Liberty New York Gas, a natural gas company in Massena, New York, which installed a small, 10-kilowatt electrolyzer in a shipping container directly outside its office as part of a pilot project. Like many natural gas companies, Liberty is testing blending small amounts of hydrogen into its system — in this case, directly into the heating systems it uses in the office building — to evaluate it as an option for lowering emissions across its customer base. The equipment draws electricity from the local electric grid, which, in that region, mostly comes from low-cost hydroelectric power plants.
Taking into account the expected manufacturing cost for a commercial-scale electrolyzer, Ecolectro says that a project paying the same low price for water and power as Liberty would be able to produce hydrogen for less than $2.50 per kilogram — even without subsidies. Through its partnership with Re:Build, the company will produce electrolyzers in the 250- to 500-kilowatt range, as well as in the 1- to 5-megawatt range. It will be announcing a larger 250-kilowatt pilot project later this year, Gordon said.
All of this sounded promising, but what I really wanted to know is who Ecolectro thought its customers were going to be. Demand for clean hydrogen, or the lack thereof, is perhaps the biggest challenge the industry faces to scaling, after cost. Of the roughly 13 million to 15 million tons of clean hydrogen production announced to come online between now and 2030, companies only have offtake agreements for about 2.5 million tons, according to Kaur of BNEF. Most of those agreements are also non-binding, meaning they may not even happen.
Gordon tied companies’ struggle with offtake to their business models of building big, expensive, facilities in remote areas, meaning the hydrogen has to be transported long distances to customers. He said that when he was with Universal Hydrogen, he tried negotiating offtake agreements with some of these big projects, but they were asking customers to commit to 20-year contracts — and to figure out the delivery on their own.
“Right now, where we see the industry is that people want less hydrogen than that,” he said. “So we make it much easier for the customer to adopt by leasing them this unit. They don’t have to pay some enormous capex, and then it’s on site and it’s producing a fair amount of hydrogen for them to engage in pilot studies of blending, or refining, or whatever they’re going to use it for.”
He expects most of the demand to come from industrial customers that already use hydrogen, like fertilizer companies and refineries, that want to switch to a cleaner version of the fuel, or hydrogen-curious companies that want to experiment with blending it into their natural gas burners to reduce their emissions. Demand will also be geographically-limited to places like New York, Washington State, and Texas, that have low-cost electricity available, he said. “I think the opportunity is big, and it’s here, but only if you’re using a product like ours.”
On coal mines, Energy Star, and the EV tax credit
Current conditions: Storms continue to roll through North Texas today, where a home caught fire from a lightning strike earlier this week • Warm, dry days ahead may hinder hotshot crews’ attempts to contain the 1,500-acre Sawlog fire, burning about 40 miles west of Butte, Montana• Severe thunderstorms could move through Rome today on the first day of the papal conclave.
The International Energy Agency published its annual Global Methane Tracker report on Wednesday morning, finding that over 120 million tons of the potent greenhouse gas were emitted by oil, gas, and coal in 2024, close to the record high in 2019. In particular, the research found that coal mines were the second-largest energy sector methane emitter after oil, at 40 million tons — about equivalent to India’s annual carbon dioxide emissions. Abandoned coal mines alone emitted nearly 5 million tons of methane, more than abandoned oil and gas wells at 3 million tons.
“Coal, one of the biggest methane culprits, is still being ignored,” Sabina Assan, the methane analyst at the energy think tank Ember, said in a statement. “There are cost-effective technologies available today, so this is a low-hanging fruit of tackling methane.” Per the IEA report, about 70% of all annual methane emissions from the energy sector “could be avoided with existing technologies,” and “a significant share of abatement measures could pay for themselves within a year.” Around 35 million tons of total methane emissions from fossil fuels “could be avoided at no net cost, based on average energy prices in 2024,” the report goes on. Read the full findings here.
Opportunities to reduce methane emissions in the energy sector, 2024
IEA
The Environmental Protection Agency told staff this week that the division that oversees the Energy Star efficiency certification program for home appliances will be eliminated as part of the Trump administration’s ongoing cuts and reorganization, The Washington Post reports. The Energy Star program, which was created under President George H.W. Bush, has, in the past three decades, helped Americans save more than $500 billion in energy costs by directing them to more efficient appliances, as well as prevented an estimated 4 billion metric tons of greenhouse gas from entering the atmosphere since 1992, according to the government’s numbers. Almost 90% of Americans recognize its blue logo on sight, per The New York Times.
President Trump, however, has taken a personal interest in what he believes are poorly performing shower heads, dishwashers, and other appliances (although, as we’ve fact-checked here at Heatmap, many of his opinions on the issue are outdated or misplaced). In a letter on Tuesday, a large coalition of industry groups including the Air-Conditioning, Heating, and Refrigeration Institute, the Association of Home Appliance Manufacturers, and the U.S. Chamber of Commerce wrote to EPA Administrator Lee Zeldin in defense of Energy Star, arguing it is “an example of an effective non-regulatory program and partnership between the government and the private sector. Eliminating it will not serve the American people.”
House Speaker Mike Johnson suggested that the electric vehicle tax credit may be on its last legs, according to an interview he gave Bloomberg on Tuesday. “I think there is a better chance we kill it than save it,” Johnson said. “But we’ll see how it comes out.” He estimated that House Republicans would reveal their plan for the tax credits later this week. Still, as Bloomberg notes, a potential hangup may be that “many EV factories have been built or are under construction in GOP districts.”
As we’ve covered at Heatmap, President Trump flirted with ending the $7,500 tax credit for EVs throughout his campaign, a move that would mark “a significant setback to the American auto industry’s attempts to make the transition to electric vehicles,” my colleague Robinson Meyer writes. That holds true for all EV makers, including Tesla, the world’s most valuable auto company. However, its CEO, Elon Musk — who holds an influential position within the government — has said he supports the end of the tax credit “because Tesla has more experience building EVs than any other company, [and] it would suffer least from the subsidy’s disappearance.”
Constellation Energy Corp. held its quarterly earnings call on Tuesday, announcing that its operating revenue rose more than 10% in the first three months of the year compared to 2024, beating expectations. Shares climbed 12% after the call, with Chief Executive Officer Joe Dominguez confirming that Constellation’s pending purchase of natural gas and geothermal energy firm Calpine is on track to be completed by the end of the year, and that the nuclear power utility is “working hard to meet the power needs of customers nationwide, including powering the new AI products that Americans increasingly are using in their daily lives and that businesses and government are using to provide better products and services.”
But as my colleague Matthew Zeitlin reported, Dominguez also threw some “lukewarm water on the most aggressive load growth projections,” telling investors that “it’s not hard to conclude that the headlines are inflated.” As Matthew points out, Dominguez also has some reason to downplay expectations, including that “there needs to be massive investment in new power plants,” which could affect the value of Constellation’s existing generation fleet.
The Rockefeller Foundation aims to phase out 60 coal-fired power plants by 2030 by using revenue from carbon credits to cover the costs of closures, the Financial Times reports. The team working on the initiative has identified 1,000 plants in developing countries that would be eligible for the program under its methodology.
Rob and Jesse go deep on the electricity machine.
Last week, more than 50 million people across mainland Spain and Portugal suffered a blackout that lasted more than 10 hours and shuttered stores, halted trains, and dealt more than $1 billion in economic damage. At least eight deaths have been attributed to the power outage.
Almost immediately, some commentators blamed the blackout on the large share of renewables on the Iberian peninsula’s power grid. Are they right? How does the number of big, heavy, spinning objects on the grid affect grid operators’ ability to keep the lights on?
On this week’s episode of Shift Key, Jesse and Rob dive into what may have caused the Iberian blackout — as well as how grid operators manage supply and demand, voltage and frequency, and renewables and thermal resources, and operate the continent-spanning machine that is the power grid. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: So a number of people started saying, oh, this was actually caused because there wasn’t enough inertia on the grid — that Spain kind of flew too close to the sun, let’s say, and had too many instantaneous resources that are metered by inverters and not by these large mechanical generators attached to its grid. Some issue happened and it wasn’t able to maintain the frequency of its grid as needed. How likely do you think that is?
Jesse Jenkins: So I don’t think it’s plausible as the precipitating event, the initial thing that started to drive the grid towards collapse. I would say it did contribute once the Iberian grid disconnected from France.
So let me break that down: When Spain and Portugal are connected to the rest of the continental European grid, there’s an enormous amount of inertia in that system because it doesn’t actually matter what’s going on just in Spain. They’re connected to this continen- scale grid, and so as the frequency drops there, it drops a little bit in France, and it drops a little bit in Latvia and all the generators across Europe are contributing to that balance. So there was a surplus of inertia across Europe at the time.
Once the system in Iberia disconnected from France, though, now it’s operating on its own as an actual island, and there it has very little inertia because the system operator only scheduled a couple thousand megawatts of conventional thermal units of gas power plants and nuclear. And so it had a very high penetration on the peninsula of non-inertia-based resources like solar and wind. And so whatever is happening up to that point, once the grid disconnected, it certainly lacked enough inertia to recover at that point from the kind of cascading events. But it doesn’t seem like a lack of inertia contributed to the initial precipitating event.
Something — we don’t know what yet — caused two generators to simultaneously disconnect. And we know that we’ve observed oscillation in the frequency, meaning something happened to disturb the frequency in Spain before all this happened. And we don’t know exactly what that disturbance was.
There could have been a lot of different things. It could have been a sudden surge of wind or solar generation. That’s possible. It could have been something going wrong with the control system that manages the automatic response to changes in frequency — they were measuring the wrong thing, and they started to speed up or slow down, or something went wrong. That happened in the past, in the case of a generator in Florida that turned on and tried to synchronize with the grid and got its controls wrong, and that causes caused oscillations of the frequency that propagated all through the Eastern Interconnection — as far away as North Dakota, which is like 2,000 miles away, you know? So these things happen. Sometimes thermal generators screw up.
Music for Shift Key is by Adam Kromelow.