Weekly Market Recap (October 11) – Canada Pushes Sustainable Investment Taxonomy to Drive Green Economy
On Wednesday, Canadian Finance Minister Chrystia Freeland announced Canada’s homegrown green investment taxonomy, also known as the Made-in-Canada Sustainable Investment Guidelines. This taxonomy categorizes investments based on scientifically determined criteria to promote private capital investment in low-emission or zero-emission green activities, aiming to achieve Canada’s climate objectives of net-zero emissions by 2050 and limiting temperature rise to 1.5°C.
To reach this goal, Canada requires approximately $125 to $140 billion in annual investment. To attract green investment, the federal government has introduced $93 billion in tax credits. On the same day the Canadian sustainable investment taxonomy was announced, the federal government successfully issued an additional $2 billion in green bonds.
In December 2023, Scott Williamson, Managing Director of Blackstone Minerals Ltd (ASX: BSX, OTCQX: BLSTF), was interviewed by METALS 100. During the interview, Scott discussed the company’s strategy of “Looking Forward, Green Mining” and emphasized their collaboration with teams committed to sustainable mining and minimizing the carbon footprint. Blackstone is dedicated to establishing an integrated battery metals processing facility in Vietnam to produce nickel/cobalt/manganese precursor products for Asia’s growing lithium-ion battery industry.
Besides low-emission green investments, the Canadian taxonomy also establishes a “transition” category to facilitate decarbonization. However, the government does not expect new natural gas production to qualify for either category, though activities that “significantly reduce emissions from existing natural gas production and/or emissions associated with limited expansion of existing production sites” may be eligible. The backgrounder did not mention nuclear energy activities.
The definitions of green and transition investments are as follows:
- Green: Low- or zero-emission economic activities, such as green hydrogen, solar, and wind energy generation, or supportive economic activities like electricity transmission lines and hydrogen pipelines.
- Transition: Emission-intensive activities critical for sectoral transformation and consistent with net-zero and 1.5°C transition pathways, such as installing lower-emission (electric) furnaces for steel production.
This taxonomy will be developed and managed by a third-party organization, with plans to release classifications for two to three priority sectors within 12 months of commencing work. Priority sectors include electricity, transportation, buildings, agriculture and forestry, as well as manufacturing, mining, and natural gas. Examples of green activities provided during the backgrounder include hydrogen, solar, and wind power generation, and electricity transmission lines. Additionally, mining of critical minerals like copper and lithium might be considered transition activities.
Clean Energy
Electric Cars
Energy Metals
METALS 100 - Nickel