You’re out of free articles.
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
Sign In or Create an Account.
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Welcome to Heatmap
Thank you for registering with Heatmap. Climate change is one of the greatest challenges of our lives, a force reshaping our economy, our politics, and our culture. We hope to be your trusted, friendly, and insightful guide to that transformation. Please enjoy your free articles. You can check your profile here .
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Subscribe to get unlimited Access
Hey, you are out of free articles but you are only a few clicks away from full access. Subscribe below and take advantage of our introductory offer.
subscribe to get Unlimited access
Offer for a Heatmap News Unlimited Access subscription; please note that your subscription will renew automatically unless you cancel prior to renewal. Cancellation takes effect at the end of your current billing period. We will let you know in advance of any price changes. Taxes may apply. Offer terms are subject to change.
Create Your Account
Please Enter Your Password
Forgot your password?
Please enter the email address you use for your account so we can send you a link to reset your password:
If the global shipping industry were its own nation, it would be the sixth largest emitter of carbon dioxide, belching about a billion tons of the stuff into the atmosphere every year. And not to state the obvious, but the sector isn’t going anywhere. Not only is cargo shipping the means by which 80% of global trade is carried out, but transporting goods via ship is actually much more fuel-efficient than the alternatives.
That means that slashing shipping emissions, which account for nearly 3% of the global total, is 100% necessary for a decarbonized future. But unlike most other industries, there’s a global regulatory body — the International Maritime Organization — that can set goals and mandates to ensure that decarbonization happens on schedule. The IMO is targeting net-zero shipping emissions by 2050, with a 40% reduction in the carbon intensity of international shipping by 2030 compared to 2008. And while these goals aren’t binding, forthcoming measures set to be developed and adopted late next year will be.
Shipping decarbonization is still in its early infancy though, meaning the pathway to net zero remains highly unclear — and that there’s lots of room for technological innovation. One company that’s gained traction in the past few years is aiming more at the “net” than the “zero” part of that equation — rather than develop clean fuels, UK-based startup Seabound is retrofitting ships with onboard carbon capture devices. The process uses a technology called calcium-looping that allows the company to capture carbon from the ship’s exhaust system, essentially locking it up in a limestone rock, and then process it later on land.
Though it’s relatively unproven, onboard carbon capture has the potential to gain ground quickly if it can be shown to work at scale. But precisely because thetechnology is unproven, the industry is far from unified in the idea that it will play a consequential role in the final decarbonization picture. “Alternative fuels are probably going to be the dominant solution,” Aparajit Pandey, shipping decarbonization lead at the think tank RMI, told me.
Indeed, low and zero-carbon fuels made from green methanol or ammonia (which are themselves made from green hydrogen) are widely considered the leading contenders in this space — while methanol does produce some CO2 when burned, it’s much cleaner than fossil fuels due to its low carbon and high oxygen content, and ammonia contains no carbon at all. But it could take a while to ramp up production to meet the industry’s ravenous fuel demand. Plus, repowering an existing ship with ammonia or methanol requires an expensive and time-consuming engine retrofit, and turning over the entire global fleet could take decades.
Other ideas and approaches abound. Biofuels? They come with a familiar host of concerns, plus fuel production is inherently limited by the amount of biomass that’s available. Solar-powered ships? Folks are trying, but current panels aren’t nearly energy dense enough to power a freighter on their own. Electrifying ships? It definitely makes sense for smaller vessels like ferries and tugboats, but batteries also take up a lot of space that could otherwise be used for freight. They also need to be either charged or swapped, requiring infrastructure that just doesn’t exist yet.
“Carbon capture is probably the only way that you can get a meaningful amount of emissions reduction in any near term way,” Clea Kolster, partner and head of science at Lowercarbon Capital, told me, referring to the cargo shipping industry. Lowercarbon led Seabound’s $4.4 million seed round two years ago.
This is not a zero sum calculation, however. Seabound CEO Alisha Fredricksson told me that she believes both methanol and ammonia fuels have a significant role to play. “They’re just taking a long time to develop. And so we won't have sufficient supply for another 10, 20 years or so.”
Seabound’s system works by reacting the CO2 in a ship’s exhaust gas with calcium oxide to form solid calcium carbonate (aka limestone). This essentially locks the carbon away in small pebbles, which are unloaded when the ship docks. Because Seabound doesn’t purify or compress the CO2 onboard, the company says its system requires “negligible” amounts of additional fuel to operate. Once on land, the plan is for Seabound to either sell the limestone for use as a building material or to separate the CO2 and calcium oxide; the latter could then be reused to capture more carbon, while the former could either be used to produce methanol shipping fuel or geologically sequestered.
There are other companies attempting onboard carbon capture: Value Maritime, Mitsubishi, and Wartsila, among others, all of which rely on amine-based systems, a well-proven technology for carbon removal on land. But Fredricksson told me that miniaturizing these systems to work on ships is much more capital and energy intensive than Seabound’s decoupled approach, which allows the company to capture the CO2 at sea and process it later on land. This older tech also produces liquified CO2, which she says ports are less equipped to handle than a solid material like limestone.
Seabound completed its maiden voyage earlier this year, leaving from Turkey and traveling around the Middle East in a months-long trip that put their tech to the test in the real world for the first time. The system was installed on a freighter from Lomar Shipping, and was able to capture carbon at 78% efficiency and sulfur, a pollutant that can cause respiratory problems and acid rain, at about 90% efficiency while it was running.
Fredricksson and the company’s backers deemed the voyage a great success. “We hit the results we were looking for,” she told me. But in the grand scheme of things, the pilot was still quite small-scale. Seabound’s system only captured about 1 metric ton of carbon per day, a tiny percent of the ship’s overall emissions. That’s because the system was only running for a total of around 100 hours during the two months it was at sea. The objective, Fredricksson told me, was not to capture as much CO2 as possible, but to demonstrate the technical feasibility of the system and prepare for future scale-up.
Ultimately, the company hopes to capture up to 95% of a ship’s carbon emissions. But similar to batteries, this involves a space-related tradeoff. A larger, more effective carbon capture system would mean less room for cargo. “So I think the main goal for our engineering team over time will be to increase the efficiency to pack more and more tons of CO2 into each container,” Fredricksson told me. Right now, she says that 10- to 14-day voyages are Seabound’s sweet spot, given the size of its systems. The company hopes to build its first full scale system by the end of this year and start delivering to commercial customers in 2025.
The degree of interest in Seabound’s systems will depend in no small part on forthcoming directives from the IMO. As of now, there’s a rule mandating that ships calculate their energy efficiency and report it to the organization. Fredricksson says it’s already getting harder to sell ships with lower ratings. Pandey said he thinks future regulations could resemble the FuelEU initiative, which requires a steady decrease in the emissions intensity of shipping fuels over time, from 2% in 2025 to up to 80% by 2050.
While it’s unclear how a rule like this would incorporate onboard carbon capture into its framework, Pandey told me that if Seabound can prove out its tech on a larger scale, the approach is promising. “Of the carbon capture solutions that are out there, they’re probably the most innovative,” he told me. But he’s not sure that the company’s aim to commercialize by next year is realistic. “From now to prove it out to scale, who knows? Five years, six years, seven years, something like that,” Pandey guessed, “I think it could be viable, but it's so early.”
A recent report on the potential of onboard carbon capture from DNV, an organization that maintains technical standards for ships, agrees that a longer timeline is more likely, stating that, “With the wider [carbon capture, utilization, and storage] infrastructure in development, scaling up of the maritime carbon capture network will take time and is expected to reach a broader uptake after 2030.”
Since returning from its first voyage, Seabound has reconfigured its system to fit into modified shipping containers that are intended to reduce retrofit time and costs. Now, if a shipowner wants to use Seabound’s system, the primary modification involves installing pipes to route exhaust from the ship’s smokestack or funnel to the company’s carbon capture device. Fredricksson estimates installation costs will be on the order of $100,000 per ship, though that will vary greatly depending on vessel size and type.
But if that estimate is in the right ballpark, it would be orders of magnitude cheaper than retrofitting a ship with an engine built for ammonia or methanol fuels. And yet Pandey isn’t so sure ship operators will be keen on either upgrade. “My strong guess is if they’re not going to retrofit a vessel for a new engine, they’re also not going to retrofit it for carbon capture,” Pandey told me.
Fredricksson expects Seabound will raise a Series A round later this year or early next, to help get its first commercial units off the line. And apparently, there’s been loads of investor interest. “Shipping and maritime is new for the climate tech ecosystem,” Fredricksson told me, meaning there’s lots to be gained by moving quickly and early. “There is so much CO2 out there being emitted by ships,” Fredricksson said, “and not a lot of solutions yet going after them.”
Log in
To continue reading, log in to your account.
Create a Free Account
To unlock more free articles, please create a free account.
“We had enough assurance that the president was going to deal with them.”
A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.
Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.
It’s not entirely clear what the president could do to unilaterally “deal with” tax credits already codified into law. Norman declined to answer direct questions from reporters about whether GOP holdouts like himself were seeking an executive order on the matter. But another Republican holdout on the bill, Representative Chip Roy of Texas, told reporters Wednesday that his vote was also conditional on blocking IRA “subsidies.”
“If the subsidies will flow, we’re not gonna be able to get there. If the subsidies are not gonna flow, then there might be a path," he said, according to Jake Sherman of Punchbowl News.
As of publication, Roy has still not voted on the rule that would allow the bill to proceed to the floor — one of only eight Republicans yet to formally weigh in. House Speaker Mike Johnson says he’ll, “keep the vote open for as long as it takes,” as President Trump aims to sign the giant tax package by the July 4th holiday. Norman voted to let the bill proceed to debate, and will reportedly now vote yes on it too.
Earlier Wednesday, Norman said he was “getting a handle on” whether his various misgivings could be handled by Trump via executive orders or through promises of future legislation. According to CNN, the congressman later said, “We got clarification on what’s going to be enforced. We got clarification on how the IRAs were going to be dealt with. We got clarification on the tax cuts — and still we’ll be meeting tomorrow on the specifics of it.”
Neither Norman nor Roy’s press offices responded to a request for comment.
The foreign entities of concern rules in the One Big Beautiful Bill would place gigantic new burdens on developers.
Trump campaigned on cutting red tape for energy development. At the start of his second term, he signed an executive order titled, “Unleashing Prosperity Through Deregulation,” promising to kill 10 regulations for each new one he enacted.
The order deems federal regulations an “ever-expanding morass” that “imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness.” It goes on to say that these regulations “are often difficult for the average person or business to understand,” that they are so complicated that they ultimately increase the cost of compliance, as well as the risks of non-compliance.
Reading this now, the passage echoes the comments I’ve heard from industry groups and tax law experts describing the incredibly complex foreign entities of concern rules that Congress — with the full-throated backing of the Trump administration — is about to impose on clean energy projects and manufacturers. Under the One Big Beautiful Bill Act, wind and solar, as well as utility-scale energy storage, geothermal, nuclear, and all kinds of manufacturing projects will have to abide by restrictions on their Chinese material inputs and contractual or financial ties with Chinese entities in order to qualify for tax credits.
“Foreign entity of concern” is a U.S. government term referring to entities that are “owned by, controlled by, or subject to the jurisdiction or direction of” any of four countries — Russia, Iran, North Korea, and most importantly for clean energy technology, China.
Trump’s tax bill requires companies to meet increasingly strict limits on the amount of material from China they use in their projects and products. A battery factory starting production next year, for example, would have to ensure that 60% of the value of the materials that make up its products have no connection to China. By 2030, the threshold would rise to 85%. The bill lays out similar benchmarks and timelines for clean electricity projects, as well as other kinds of manufacturing.
But how companies should calculate these percentages is not self-evident. The bill also forbids companies from collecting the tax credits if they have business relationships with “specified foreign entities” or “foreign-influenced entities,” terms with complicated definitions that will likely require guidance from the Treasury for companies to be sure they pass the test.
Regulatory uncertainty could stifle development until further guidance is released, but how long that takes will depend on if and when the Trump administration prioritizes getting it done. The One Big Beautiful Bill Act contains a lot of other new tax-related provisions that were central to the Trump campaign, including a tax exemption for tips, which are likely much higher on the department’s to-do list.
Tax credit implementation was a top priority for the Biden administration, and even with much higher staffing levels than the department currently has, it took the Treasury 18 months to publish initial guidance on foreign entities of concern rules for the Inflation Reduction Act’s electric vehicle tax credit. “These things are so unbelievably complicated,” Rachel McCleery, a former senior advisor at the Treasury under Biden, told me.
McCleery questioned whether larger, publicly-owned companies would be able to proceed with major investments in things like battery manufacturing plants until that guidance is out. She gave the example of a company planning to pump out 100,000 batteries per year and claim the per-kilowatt-hour advanced manufacturing tax credit. “That’s going to look like a pretty big number in claims, so you have to be able to confidently and assuredly tell your shareholder, Yep, we’re good, we qualify, and that requires a certification” by a tax counsel, she said. To McCleery, there’s an open question as to whether any tax counsel “would even provide a tax opinion for publicly-traded companies to claim credits of this size without guidance.”
John Cornwell, the director of policy at the Good Energy Collective, which conducts research and advocacy for nuclear power, echoed McCleery’s concerns. “Without very clear guidelines from the Treasury and IRS, until those guidelines are in place, that is going to restrict financing and investment,” Cornwell told me.
Understanding what the law requires will be the first challenge. But following it will involve tracking down supply chain data that may not exist, finding alternative suppliers that may not be able to fill the demand, and establishing extensive documentation of the origins of components sourced through webs of suppliers, sub-suppliers, and materials processors.
The Good Energy Collective put out an issue brief this week describing the myriad hurdles nuclear developers will face in trying to adhere to the tax credit rules. Nuclear plants contain thousands of components, and documenting the origin of everything from “steam generators to smaller items like specialized fasteners, gaskets, and electronic components will introduce substantial and costly administrative burdens,” it says. Additionally the critical minerals used in nuclear projects “often pass through multiple processing stages across different countries before final assembly,” and there are no established industry standards for supply chain documentation.
Beyond the documentation headache, even just finding the materials could be an issue. China dominates the market for specialized nuclear-grade materials manufacturing and precision component fabrication, the report says, and alternative suppliers are likely to charge premiums. Establishing new supply chains will take years, but Trump’s bill will begin enforcing the sourcing rules in 2026. The rules will prove even more difficult for companies trying to build first-of-a-kind advanced nuclear projects, as those rely on more highly specialized supply chains dominated by China.
These challenges may be surmountable, but that will depend, again, on what the Treasury decides, and when. The Department’s guidance could limit the types of components companies have to account for and simplify the documentation process, or it could not. But while companies wait for certainty, they may also be racking up interest. “The longer there are delays, that can have a substantial risk of project success,” Cornwell said.
And companies don’t have forever. Each of the credits comes with a phase-out schedule. Wind manufacturers can only claim the credits until 2028. Other manufacturers have until 2030. Credits for clean power projects will start to phase down in 2034. “Given the fact that a lot of these credits start lapsing in the next few years, there’s a very good chance that, because guidance has not yet come out, you’re actually looking at a much smaller time frame than than what is listed in the bill,” Skip Estes, the government affairs director for Securing America’s Energy Future, or SAFE, told me.
Another issue SAFE has raised is that the way these rules are set up, the foreign sourcing requirements will get more expensive and difficult to comply with as the value of the tax credits goes down. “Our concern is that that’s going to encourage companies to forego the credit altogether and just continue buying from the lowest common denominator, which is typically a Chinese state-owned or -influenced monopoly,” Estes said.
McCleery had another prediction — the regulations will be so burdensome that companies will simply set up shop elsewhere. “I think every industry will certainly be rethinking their future U.S. investments, right? They’ll go overseas, they’ll go to Canada, which dumped a ton of carrots and sticks into industry after we passed the IRA,” she said.
“The irony is that Republicans have historically been the party of deregulation, creating business friendly environments. This is completely opposite, right?”
On the budget debate, MethaneSAT’s untimely demise, and Nvidia
Current conditions: The northwestern U.S. faces “above average significant wildfire potential” for July • A month’s worth of rain fell over just 12 hours in China’s Hubei province, forcing evacuations • The top floor of the Eiffel Tower is closed today due to extreme heat.
The Senate finally passed its version of Trump’s One Big Beautiful Bill Act Tuesday morning, sending the tax package back to the House in hopes of delivering it to Trump by the July 4 holiday. The excise tax on renewables that had been stuffed into the bill over the weekend was removed after Senator Lisa Murkowski of Alaska struck a deal with the Senate leadership designed to secure her vote. In her piece examining exactly what’s in the bill, Heatmap’s Emily Pontecorvo explains that even without the excise tax, the bill would “gum up the works for clean energy projects across the spectrum due to new phase-out schedules for tax credits and fast-approaching deadlines to meet complex foreign sourcing rules.” Debate on the legislation begins on the House floor today. House Speaker Mike Johnson has said he doesn’t like the legislation, and a handful of other Republicans have already signaled they won’t vote for it.
The Environmental Protection Agency this week sent the White House a proposal that is expected to severely weaken the federal government’s ability to rein in planet-warming pollution. Details of the proposal, titled “Greenhouse Gas Endangerment Finding and Motor Vehicle Reconsideration,” aren’t clear yet, but EPA Administrator Lee Zeldin has reportedly been urging the Trump administration to repeal the 2009 “endangerment finding,” which explicitly identified greenhouse gases as a public health threat and gave the EPA the authority to regulate them. Striking down that finding would “free EPA from the legal obligation to regulate climate pollution from most sources, including power plants, cars and trucks, and virtually any other source,” wrote Alex Guillén at Politico. The title of the proposal suggests it aims to roll back EPA tailpipe emissions standards, as well.
Get Heatmap AM directly in your inbox every morning:
So long, MethaneSAT, we hardly knew ye. The Environmental Defense Fund said Tuesday that it had lost contact with its $88 million methane-detecting satellite, and that the spacecraft was “likely not recoverable.” The team is still trying to figure out exactly what happened. MethaneSAT launched into orbit last March and was collecting data about methane pollution from global fossil fuel infrastructure. “Thanks to MethaneSAT, we have gained critical insight about the distribution and volume of methane being released from oil and gas production areas,” EDF said. “We have also developed an unprecedented capability to interpret the measurements from space and translate them into volumes of methane released. This capacity will be valuable to other missions.“ The good news is that MethaneSAT was far from the only methane-tracking satellite in orbit.
Nvidia is backing a D.C.-based startup called Emerald AI that “enables AI data centers to flexibly adjust their power consumption from the electricity grid on demand.” Its goal is to make the grid more reliable while still meeting the growing energy demands of AI computing. The startup emerged from stealth this week with a $24.5 million seed round led by Radical Ventures and including funding from Nvidia. Emerald AI’s platform “acts as a smart mediator between the grid and a data center,” Nvidia explains. A field test of the software during a grid stress event in Phoenix, Arizona, demonstrated a 25% reduction in the energy consumption of AI workloads over three hours. “Renewable energy, which is intermittent and variable, is easier to add to a grid if that grid has lots of shock absorbers that can shift with changes in power supply,” said Ayse Coskun, Emerald AI’s chief scientist and a professor at Boston University. “Data centers can become some of those shock absorbers.”
In case you missed it: California Governor Gavin Newsom on Monday rolled back the state’s landmark Environmental Quality Act. The law, which had been in place since 1970, required environmental reviews for construction projects and had become a target for those looking to alleviate the state’s housing crisis. The change “means most urban developers will no longer have to study, predict, and mitigate the ways that new housing might affect local traffic, air pollution, flora and fauna, noise levels, groundwater quality, and objects of historic or archeological significance,” explainedCal Matters. On the other hand, it could also mean that much-needed housing projects get approved more quickly.
Tesla is expected to report its Q2 deliveries today, and analysts are projecting a year-over-year drop somewhere from 11% to 13%.