Axios Generate

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🐪 Halfway. We'll start the edition with a double dose of tech news, and then roam widely, all in just 1,256 words, 4.5 minutes.

🧳 Situational awareness: China's top climate diplomat, Liu Zhenmin, will travel to D.C. this month and meet with U.S. counterpart John Podesta, he tells Bloomberg.

  • Why it matters: Both are new to the diplomatic roles for the world's largest greenhouse gas emitters.

🎶 At this moment in 1995, Montell Jordan was midway through a 7-week run atop the Billboard Hot 100 with today's unstoppable intro tune...

1 big thing: Carbon removal tech gets an up-vote

Illustration: Gabriella Turrisi/Axios

Vaulted Deep, a startup that injects carbon-rich organic wastes deep underground, just landed a major deal with corporate giants looking to jumpstart CO2 removal markets.

Why it matters: The agreement with Frontier, whose members include Meta and Alphabet, signals confidence in the scalability of Vaulted's tech.

  • And it's a shot in the arm for emerging, biomass-based removal methods more broadly.

State of play: Under the $58 million deal, Vaulted will remove 152,480 tons of CO2 between 2024 and 2027, with an option for subsequent buys.

  • It's Frontier's second commercial deal in the biomass removal and storage space, following last year's contract with Charm Industrial.

How it works: Vaulted uses organic materials — farm wastes, sewage sludge, food wastes and more — that would otherwise release CO2 and methane when burned, landfilled or spread on land.

  • They convert this into a slurry that's injected deep and permanently underground.
  • Vaulted claims cost advantages, because CO2 uptake in organic materials is natural. Meanwhile, transformation to slurry requires relatively little processing and energy inputs, among other reasons.

Catch up quick: Today's deal follows a small-scale 2023 agreement with Frontier that Vaulted delivered.

  • The company spun out of Advantek Waste Management last year, with plans to harness the older company's tech for carbon removal, and raised an $8 million seed round.
  • Today's deal is exponentially larger than prior agreements with Frontier and other customers. It's 91 times the size of last year's pilot-scale Frontier deal.

What they're saying: "We're super excited about Vaulted's speed to execution, their enormous scale and capacity potential, and the fact that they can get to sub-$100 a ton [in removal cost] in this decade," Hannah Bebbington, Frontier's strategy lead, tells Axios.

The big picture: Frontier vets removal tech for viability and integrity, advises companies, and brokers deals.

  • They're working with an array of startups and methods, including direct air capture (DAC), enhanced weathering, and ocean-based systems.

Reality check: Today's removal volumes are tiny compared with the gigaton scale needed to become a real weapon against global warming in decades ahead.

  • But these are crucial years for steering markets toward needle-moving deployment levels.

What's next: Most injections for Frontier buyers will occur at Vaulted's Great Plains site in Kansas, but the startup also plans to bring three new facilities online by the end of 2027, CEO Julia Reichelstein said.

2. Microsoft inks huge energy deal amid data center demand growth

Illustration: Gabriella Turrisi/Axios

Investment giant Brookfield Asset Management will develop 10.5 gigawatts of renewable energy between 2026 and 2030 to serve Microsoft's power needs, the companies announced today.

Why it matters: The plan for projects in the U.S. and Europe is mammoth by corporate procurement standards.

Stunning stat: The deal is roughly eight times bigger than the largest single corporate power purchase agreement in history, they said.

The big picture: It involves wind, solar, and "new or impactful carbon free energy generation technologies."

  • Microsoft hopes to match 100% of its power use on a 24/7 basis with "clean" sources by 2030.
  • Terms of the deal were not disclosed.

What we're watching: The "global framework agreement" also envisions expanding its scope and adding other continents.

Go deeper: The FT, which first reported the news, has more details.

3. El Niño likely drove Panama Canal drought

View of the Miraflores Locks of the Panama Canal on Jan. 10. Photo: Martin Bernetti/AFP via Getty Images

El Niño, rather than climate change, was the primary culprit behind a severe drought that is still having ripple effects throughout global supply chains, a new study found.

Why it matters: The conditions have significantly reduced ship traffic through the Panama Canal. Yet the study's findings demonstrate that not every extreme weather or climate event is primarily tied to human-caused climate change.

Zoom in: During 2023, Panama saw its third-driest year on record, with all but one of the 8 months in the wet season coming in with below-average rainfall in the area of the Panama Canal watershed, the study found.

  • Lowering levels of Lake Gatún, critical to the functioning of the canal and serving as a reservoir for Panamanians, caused canal officials to reduce the number of ships that transit the canal each day.
  • This led to lengthy backups and rerouting that cost both shippers and the canal authority. It also came as instability in the Red Sea made the Suez Canal route perilous.

What they found: The data established clear ties between the drought in Panama and El Niño, which is a natural climate cycle characterized by unusually warm waters in the tropical Pacific Ocean, along with large-scale shifts in weather patterns.

  • "With neither climate model data nor a strong physical argument... we therefore cannot conclude that the observed drying is attributable to human-caused climate change," the researchers wrote in their main findings.

Go deeper

4. Biden’s corn-y plan for “sustainable” fuel

Illustration: Rebecca Zisser / Axios

The Biden team's guidance for the new "sustainable" aviation fuel tax credit provides a pathway for ethanol to qualify.

Why it matters: Ethanol is reviled by climate activists for land use reasons, so Biden is getting backlash from environmentalist circles.

Driving the news: The Treasury Department yesterday released final guidance for aviation fuel with fewer emissions than petroleum to qualify for a new Inflation Reduction Act credit.

  • It included plans to use an emissions model preferred by ethanol producers that will let "climate-smart" crop-based energy fuels access the credit.

What they're saying: "At a time of increasing demands on limited global land, we cannot afford to use food to fuel airplanes," World Resources Institute director Dan Lashof said in a statement.

Talk to our sales team about Axios Pro: Energy Policy for a steady diet of scoops and smart analysis.

5. Catch up quick on policy: Uranium, Big Oil, DOE

Illustration: Annelise Capossela/Axios

⚛️ The Senate passed a Russian uranium ban bill last night, sending it to President Biden's desk after a lengthy delay, Axios Pro's Nick Sobczyk reports.

  • Why it matters: The legislation could shake up the nuclear power industry's fuel supply — but it also opens up billions in funding for domestic production of enriched uranium. Full story.

⛏️ The Energy Department's loan office has made clear that it's willing to fund critical mineral mining projects.

  • Why it matters: Abigail Hunter of the group Securing America's Future Energy said this will help overcome "anticompetitive maneuvering from foreign adversaries" and a "challenging environment" for private capital.

🛢️ A report released yesterday by Senate and House Democrats alleges that large oil companies attempted to deceive the public about the effects of climate change for decades, Axios' Stephen Neukam reports.

6. Tesla's charging "head scratcher"

Illustration: Annelise Capossela/Axios

Tesla's recent stock rally went into reverse amid the decision to scale back its charging ambitions for now.

State of play: The share price fell 5.5% yesterday following the revelation that Tesla laid off charging boss Rebecca Tinucci and nearly all of her team.

Why it matters: CEO Elon Musk has long described Tesla's Supercharger network as a competitive advantage and key to EV sales growth.

  • A suite of other automakers have deals to use Tesla's system.

What they're saying: Wedbush Securities analyst Dan Ives called the move a "head scratcher," but doesn't think it's permanent.

  • "Ultimately Musk is going to cut some of these departments down and then build them back up over time," he said via email.
  • "Tesla is going through a Category 5 demand storm and unfortunately strategic changes are needed to get the train back on the tracks."

7. North Atlantic record hot streak ends (for now)

Average sea surface temperatures for North Atlantic Ocean Basin
Data: NOAA OIST v2.1 via Climate Reanalyzer, University of Maine; Note: Mean refers to 1982-2011; Chart: Simran Parwani/Axios

Ocean temperatures in the North Atlantic Ocean Basin went an astonishing 421 straight days at record highs, ending the streak on Monday. Temperatures have cooled slightly (and temporarily), as the summer approaches.

Why it matters: Ocean temperatures in the North Atlantic, particularly certain portions of it, will help determine how active the 2024 Atlantic hurricane season will be.

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🙏 Thanks to Chris Speckhard and Javier E. David for edits to today's edition, along with the brilliant Axios Visuals team.