The stock market and the sea

Major investments in the future sustainable ocean business are needed. The goal is to increase revenues from the current, unsustainable 2.5 trillion USD to sustainable of 24 trillion, according to a market analysis, by Suisse Credit.

The blue economy depends on the green revolution. The previous revolution, the ICT one, went reasonably well over a 10-15 years period. It was built on ideas and inventions from the 60s. Back then it was the Cold War that prompted the United States to connect computers in the event of war and the breakdown of telephone lines. Today, it is the evidence of an impoverished and heated planet that is urging states and the market to change direction.

A green or greedy market?

Investments in green technology is booming. The EU and a number of countries have used Covid-19 rescue packages to accelerate the green transition. The S&P Global Clean Energy Index, which covers 30 larger companies and green tech-stocks, has risen by 37 percent in two years. And Bill Gates is involved in the development. Things happen.

Investments in the blue economy must be responsible, sustainable, regulated and fair. These are the basic principles of the report that the ocean panel led by Norwegian Prime Minister, Erna Solberg presented December 3. “Greed is good” has long been rejected by, among others, Nobel Prize winner in economics Paul Krugman.

It is difficult to disagree with most of what is stated in the report. Personally, I think it is a sign of quality that the report is cautiously awaiting deep sea mining. Bad news for those investing. But not critical for the worlds supply knowing that the United States, among others is investing in developing its own REM industry on land in response to China’s long-standing near-monopoly. Let’s hope this trend is reflected in the market.

The report suggests 74 priority actions. Here are some selected sectors that still need solutions:

• The growing market demand for farmed fish means new solutions for farmed fish are needed. Land based farming is one of them, but it will require enormous amounts of water resources that in many parts of the world is scarce.

• Battery development is still looking for investments that can provide a eureka solution that can be mass-produced.

• Hydrogen requires energy to be produced.

• Offshore wind can prove to be semi-efficient despite large investments.

• Mass tourism is far from being CO2-neutral.

• The race for medicines from marine organisms is skewed.

• Production of actually degradable plastic depends on the old plastic and marine litter.

Aquaculture

A study worth noting has looked at the benefits of the world’s population eating more farmed fish. The study projected the world’s food needs where the increase until 2050 is only covered by farmed fish and current meat production is kept stable.

An area of ​​58,000 square kilometers, a little less than the size of West Virginia, for farmed fish can provide 100 million tonnes of seafood annually. This will preserve 730 million hectares of land (double the area of ​​India) as uncultivated land.

The world’s population is expected to rise to 9 billion in 2030 and 10 billion in 2050. According to the FAO, global seafood production in 2016 was 171 million tonnes, of which farmed fish accounted for 47 percent. 3.2 billion people got 20 percent of animal protein from fish. Catches from the sea increased until the mid-90s. After this, it has stabilised. It is therefore unrealistic that wild fish will be able to keep up with population growth.

In international publications, kelp forests have been valued at 19,000 US dollars per hectare / year.

Consumers demand sustainability

Consumers want sustainable solutions. As long as it does not cost more than other products or what you are used to.

Provenance is a British initiative that tracks all steps in the production chain. Using block chain technology, all data entered at each stage is available to everyone, including the consumer, and cannot be edited once the information has been entered. Consumers scan the products bar code with the mobile device and the Provenance app provides the information.

According to Provenance, 72 percent of the millennial generation in England are willing to pay more for goods that are sustainably produced and 8 out of 10 want to know the origin. Other surveys find that the majority of consumers want brands to help them to be more environmentally friendly.

Today, we “eat” 3,496 liters of water every day on average – water used to feed animals and for agricultural products. Red meat not only emits a lot of CO2 – a kilo of beef requires 15,400 liters of water. Fresh water is an increasingly scarce resource worldwide and 21 of 37 known water reservoirs are diminishing each year.

The use of fresh water in fish farming needs further research. Hydro power to operate aquaculture facilities on land requires, for example, dams that take fresh water from other places. It also affects local fishing such as in the Mekong, Congo and the Amazon. Floods and droughts are also a threat to fish farms in several parts of the world.

Batteries from the sea

At Uppsala University, Maria Strømme and her team are studying the green algae Cladophora, with a special nano structure in the cellulose which is showing promising results for use in batteries.

The algae is found in large parts of the world and has flourished compared to perennial algae and higher seaweed plants. This is partly due to increased eutrophication (increased supply of nutrients). Annual algae can utilize the increased nutrient supply more quickly than perennials.

Why is it so important to find new materials for batteries? Because lithium and cobalt is a non-renewable resource which drives the quest for deep sea mining.

Hydrogen

Investments in new coal power plants fell by 75 per cent from 2015-2018. While investments in 2015 in new power plants totalled 88 gigawatts, the figure was down to 22 in 2018. In 2020, the IEA estimates that the decline will be 11 percent. Decommissioning of coal power plants is faster than the establishment of new ones. This decline is the first since the Industrial Revolution.

Europe is the hydrogen laboratory and investing in hydrogen technology is a priority in the EU’s Covid-19 rescue packages. But there is a lot of uncertainty around hydrogen power. It is technically possible to produce CO2-free hydrogen, such as electrolysis of water based on renewable energy. But critics warn against heavy investments. As of today, it is neither economically profitable nor particularly efficient. Too much energy that could have been used directly goes into the production of hydrogen.

More than 50,000 ships are transport goods globally. Marine traffic accounts for around 2.5 per cent of the world’s CO2 emissions, the same as air traffic. The industry is working to find solutions for zero-emission vessels.

In April 2018, the international maritime organization set the goal of cutting CO2 emissions from shipping by 40 percent by 2030.

In addition, greenhouse gases will be cut by 50 percent by 2050 compared to 2008. And by 2100 at the latest, emissions will be zero. Environmental organizations believe the agreement and the goals are good, but still far from the 70 percent goal set by the EU and the Pacific states.

California

Investments in hydrogen powered boats are being made. In the waters of San Francisco a hydrogen powered catamaran for passenger traffic is already in service. The 70-foot catamaran can carry 84 passengers.

One of the reasons why the shipping industry has been hesitant to invest in hydrogen cells is the lack of ports with the right infrastructure. The infrastructure needed will not be built until the demand is big enough. The people behind the San Francisco catamaran believe hydrogen vessels must be running first to prove that this is the way to go. However, challenges to make hydrogen power economically viable in a carbon-neutral manner remain.

Offshore wind

Today, there are 1997 offshore wind projects globally. Of these, 199 are in operation. China is in the lead.

The consulting company 4C Offshore is monitoring the world’s offshore wind market. It shows the country’s flag with a small number in the corner indicating planned and initiated projects. A bit like alerts on the mobile. The top ten countries that have launched offshore wind projects are:

China: 45, England: 40, Germany: 28, Denmark: 21, Japan: 12, Belgium: 10, Netherlands: 8, Sweden: 6, South Korea: 6, Spain: 6. The United States has one.

There are large investments ongoing and many projects are in the pipeline. Vietnam is listed with 82, Germany 180, Japan 104 and China 315.

Noisy

Offshore wind turbines make low-frequency noise that disturbs whales and other large marine mammals. It can lead to collisions with boats and stranding with subsequent death. Electromagnetic fields from power cables in offshore wind farms destroy the navigational ability of eels, stingrays, sharks and other marine animals that use electromagnetism to navigate. Breeding areas for fish can also be disturbed by offshore wind turbines.

Other critics point out that an offshore wind farm providing electricity to 75,000 households could require 30,000 tonnes of iron ore, 50,000 tonnes of concrete and 900 tonnes of non-recyclable plastic. These turbines will also require much of the same metals as batteries such as lithium and cobalt.

Tourism and CO2

The Covid-19 pandemic demonstrated how a global shutdown is affecting CO2 emissions. For those advocating less human activity in terms of travel and shopping as a solution to global warming, this unwanted, global experiment gave us an interesting answer: Reducing human activity drastically is not enough, by far. Solutions are elsewhere in the equation.

This is what a research undertaken by scientists in China, the United States and Germany tells us. Less human activity is far from enough to reach emissions targets. Maybe it is a good thing? Without the crisis, the belief that we were on the right path would have lived on.

The study measured how much less CO2 the world has emitted so far in 2020: Less than during the financial crisis in 2009, less than during the oil crisis in 1979 and even less than during World War II.

It was led by Tsinghua University in Beijing with researchers from the United States and Germany. The fact that they could see the clear link between shutdown and CO2 cuts in each country makes the data precise. During the first shutdown in April, the decline was 16.9 percent. The various corona outbreaks led to less emissions as is usually seen during holidays.

The pandemic effect

In the first six months of 2020, 8.8 per cent less CO2 was emitted compared with the same period last year. This means CO2 cuts of a total of 1,551 million tonnes. The ocean absorbs a third of CO2 emissions. In other words, 500 million tonnes less CO2 in the world’s oceans now than there would have been without Covid-19. It does not help much: Usually 8,760 million tonnes go into the sea in one year. Without CO2 cuts, the sea will be 150 percent more acidic in 80 years from now than it was in the 19th century. In other words, shutdown is not enough.

The researchers studied the decline in electricity consumption in 31 countries, daily car use in more than 400 cities, daily flights, monthly production in industry in 62 countries and fuel consumption in 200 countries.

The home office effect

What sector saw the greatest CO2 cuts? Business travel or the energy and industrial sector? In fact, home office walks away with the victory: Staying at home alone accounted for 40 per cent cuts, about twice as much as the energy and industrial sector with 22 and 17 per cent cuts respectively. Domestic energy consumption decreased, but this was mostly due to an unusually warm winter.

Medicines from the sea

The interest in the ocean’s genetic resources for medicine has never been greater, including the search for a coronavirus medicine. The first HIV medicine comes from marine organisms. Many organisms have genes that survive dark and inhospitable environments and can therefore be valuable for medical use. This environment has forced these organisms to develop a complex chemical warfare.

12,998 genetic sequences from marine species have already been patented. The German chemical giant BASF has invested heavily and patented 47 percent of these. Using a genetic sequence from an algae to strengthen the canola oil from rapeseed oil, with omega-3 fatty acids is one example.

The market for global marine biotechnology is growing rapidly. This raises concerns about who will own the rights. After all, much of what can be extracted from marine life is found in international waters, outside the countries’ economic zones. Today, anyone can develop and make money on products from international waters. Developing countries fear that the rich countries or large corporations will take most of the profits.

Although the Convention on the Law of the Sea has rules for the use of the sea and its resources, it does not clearly state how states are to take care of and use biodiversity sustainably. The agreement that will regulate this was scheduled to be negotiated in April. But the corona crisis delayed negotiations. Maybe they’re waiting for Joe Biden’s maritime policy.

Plastic in the ocean

The plastic that has made life so easy for us and now we have to redo everything. The post-plastic society comes after we clean up; after we have managed to recycle and finally until we have other materials that can replace the destructive stuff. At least 8 million tonnes, probably a lot more, of plastic go into the worlds oceans every year.

World plastic production is expected to quadruple by 2050. In fact, 20 percent of world oil production will go to plastic production at today’s pace. Plastic production is more than 20 times what it was in 1964 and in 2016, 335 million tonnes of plastic were produced – that means 1,200 tonnes in 2050.

Plastic remains plastic

To be defined as degradable, 90 percent of the plastic must be degraded to pieces less than 2 millimeters within 12 weeks (microplastic is defined as less than 5 mm). In other words, plastic will be rubbish for the first 12 weeks and then switch to microplastic. But microplastics are still harmful to animals and humans. Another problem is that biodegradable bioplastic cannot be reused, as it will continue to degrade into new products. This causes the quality of the plastic to deteriorate over time.

What about those who actually make all this plastic? What solutions for the post-plastics society do companies envisage? What investments are made to make money on marine plastics?

The collaboration between Dell, General Motors and several other smaller companies aims to collect and recycle plastic in their products. The goal is to turn plastic into products before they reach the sea. In addition, plastic products are made that are already there.

The collaboration has led to several products on the market:

Bottle holder for bicycle bottles from fishing nets in Chile, credit cards, backpacks, PCs from plastic bottles in Haiti (first in the world), bags, pillowcases and tablecloths, office chairs, PC covers, and carpets from fishing equipment from Cameroon, Indonesia and the Philippines.

Lego is based 100 percent on plastic. They probably feel the pressure, and it seems that they have taken the plastic challenge seriously. They have noe choice, I believe.

Big gains in rare earth minerals market

The key to the green transition and the blue economy seems to lie in rare earth minerals (REM), cobalt and lithium. Electrification cannot do without them.

China and the United States

China has a near-monopoly on REM, extracts 220,000 tons annually and has 85 percent of the world’s extraction capacity. From 2014 to 2017, 80 percent of US mineral imports came from China. Many feared that China would use this market advantage in the trade dispute between the two countries last year. China has already enacted a law that blacklists countries that act against the country’s interests. Those who end up on the list may risk not being able to buy these high demanded minerals from China. The law can come into force as early as next year.

There are several events that point in a positive direction for the production of REM outside China.

On July 14, US President Joe Biden launched a $ 2 trillion USD green infrastructure plan. The main areas in this plan are the electrification of the transport sector and the construction of 1.5 million energy-efficient homes. All this requires REM.

On 21 July 2020, the EU launched its 750 billion Euro plan for green infrastructure and on the same day, the US Department of Defense announced its plan to strengthen REM production. This has been good news for the industry like Avalon Advanced Materials.

Deep sea mining

There are good reasons why REM attracts investors. And there are good reasons to wait. According to the US Geological Survey, there are about 7.1 million tons of cobalt reserves on land. With a total annual extraction, not only for batteries, of 110,000 tonnes, these reserves will last for 65 years. The USGS also says that there is probably more nickel, cobalt and other metals under the seabed than on land and estimates that 15 percent of the world’s cobalt consumption may come from deep sea mining in 2025.

Whether this can be done without harming the sea and life there is uncertain. Australian DeepGreen, featured in this article in the Financial Times, plans to suck up thousands of tonnes of nickel, copper and cobalt-containing nodules from the seabed and ashore.

Half of the world’s known cobalt reserves are located in DR Congo. Dangerous working conditions in these mines have long been documented. In 2016, the Washington Post made this report about working conditions there.

Other countries also have cobalt reserves. Australia is in second place with 1.2 million tonnes. But it is said that there is no lithium-ion industry that does not use Congo cobalt.

So when the Solwara-1 project started some years ago outside Papua New Guinea, the idea was precisely that the world, among other things, should get more cobalt and other raw materials for batteries, telephones and computers. The project, which was the first of its kind, stopped. The company behind it, Nautilus, has lost a lot of money and has got creditors on its back. Papua New Guinea has also lost a lot of money and Prime Minister James Marape has called it a total failure.

Stock market optimism?

The fact that the climate goals can be achieved gives reason for optimism. If China and Joe Biden keep their promises, global warming could end at 2.1 degrees within 80 years. Optimism gives stock market rise.

The cover image is from the Panama Canal during a visit in 2019, three years after the expansion, which means that boats can pass one and a half times wider.