Shaken Not Burned

Highlighting changemakers and solutions

What we’ve been reading this week

•  The EU continues dangerous fossil fuel subsidies

A key outcome wanted from the nature COP in Colombia is to address harmful subsidies that destroy nature, yet we still promote fossil fuel use. A report from analysis group Transport & Environment shows that EU countries have spent €45 billion in subsidies of fossil fuels for company cars alone. Very high fossil fuel subsidies are found in Italy, Germany, France and Poland. This is mainly due to significant benefit-in-kind tax breaks for petrol and diesel company car drivers. This tax break overwhelmingly benefits the most affluent consumers, with company car drivers earning nearly double as much as the average European consumer.

• Trade finance set to become sustainable

One of the issues that has slipped below the radar is the role of trade finance in supporting business as usual. This is finally beginning to change with the recognition that globalisation means that supply chains must decarbonise as well. Standard Chartered has just launched ESG-linked trade loans to boost the decarbonisation of commodities, while the International Chamber of Commerce has launched new standards for sustainable trade finance. Not only will this bring much greater clarity to engagement, but it will help corporates avoid greenwashing as they develop. The Principles for Sustainable Trade Finance are now open to industry-wide consultation.

• Greenwash alert as ClientEarth targets BlackRock over sustainability claims

ClientEarth has filed a complaint with the French financial regulator, Autorité des marchés financiers, accusing BlackRock of misleading investors by labelling certain investment funds as ‘sustainable’ while still heavily investing in fossil fuel companies. According to an analysis from Reclaim Finance, BlackRock's supposedly sustainable funds have invested over $1 billion in companies such as ExxonMobil, Shell, and Chevron, which are expanding fossil fuel production. ClientEarth argues that this violates EU regulations, as these investments are incompatible with the Paris Agreement's climate goals. The complaint highlights 18 retail investment funds marketed in France that hold between 1% and 27% of fossil fuel assets,  asking that Blackrock divest or stop calling the funds sustainable. It aligns with new guidelines from the European Securities and Markets Authority, which will enforce stricter rules on fund naming by May 2025. 

• Tech goes nuclear to tackle AI energy demand

The increase in energy demand for AI has driven monstrous holes in many tech companies' net zero plans. One response has been to pivot to a new focus: small, modular nuclear reactors (SMRs). The US Department of Energy has just announced $900 million in funding for third-generation and modular reactors, and Google and Amazon have placed their first orders. While nuclear has not yet shown any signs of scale-up bringing down the cost curve, the potential for nuclear energy remains open – and low carbon. Google has signed a deal to purchase 500MW of electricity overall, from Kairos Power’s first SMR online by 2030, followed by additional reactor deployments through to 2035. Meanwhile, Amazon has invested in three projects with Energy Northwest, X-energy, and Dominion Energy. The projects are expected to be able to provide low-carbon electricity from the early 2030s.

• EU promotes action on hard-to-abate steel

The European Commission has approved a €128 million Swedish state aid measure aimed at supporting a project by steel company SSAB to decarbonise its steel production. In June 2024, the steelmaker unveiled new net zero targets under the SBTi, including net zero greenhouse gas emissions for Scope 1, Scope 2 and Scope 3 by 2045. The decarbonisation of industry is critical to achieving the Paris goals and it’s becoming an increasing focus. It’s important to note, however, that energy efficiency remains the greatest level for action. Recent analysis from Danfoss shows that optimising motor efficiency in the EU alone could save up to €10.7 billion in electricity costs annually, while avoiding the equivalent annual CO2 emissions of up to two million European citizens.