June 3rd, 2024 | 07:30 CEST
Siemens Energy, Carbon Done Right Developments, ThyssenKrupp - Benefiting from the decarbonization megatrend
The world faces the challenge of mitigating climate change and developing clean energy sources. Companies offering innovative solutions for a sustainable future will gain a competitive advantage in the long term. For energy-hungry industries in particular, it is difficult to meet all demand through clean energy generation, and so carbon credits are needed to offset CO2 emissions. Using CO2 certificates offsets emissions and thus makes a valuable contribution to climate protection. We take a look at Siemens Energy, a clean energy producer; Carbon Done Right Developments, which produces CO2 certificates; and ThyssenKrupp, which aims to convert its steel industry to hydrogen energy.
time to read: 4 minutes
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Author:
Armin Schulz
ISIN:
SIEMENS ENERGY AG NA O.N. | DE000ENER6Y0 , CARBON DONE RIGHT DEVELOPMENTS INC | CA14109M1023 , THYSSENKRUPP AG O.N. | DE0007500001
Table of contents:
"[...] Recovery rates of more than 90% rare earths are another piece of the puzzle on the way to the economic viability of our project. [...]" Craig Taylor, CEO, Defense Metals
Author
Armin Schulz
Born in Mönchengladbach, he studied business administration in the Netherlands. In the course of his studies he came into contact with the stock exchange for the first time. He has more than 25 years of experience in stock market business.
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Siemens Energy - Is the sale of the wind business coming?
Siemens Energy may be planning to sell the wind turbine division of its subsidiary Siemens Gamesa Renewable Energy. According to a report by the Indian business newspaper Mint, the valuation of the business in this transaction is said to be USD 1 billion. Potential buyers for this sale include India's leading alternative energy company, Adani Renewable Energy, Masdar from Abu Dhabi, investors TPG Rise, Brookfield Energy Transition Funds, and Macquarie. A Siemens spokesperson has not yet commented on this in detail, nor have the potential buyers or the British bank Barclays, which is handling the sale.
The Company also appears to be slowly recovering in other respects. After a better than expected second financial quarter, the Company has raised its forecast for the year as a whole. A restructuring plan has been proposed for the loss-making Siemens Gamesa wind business, which should make the Company profitable again. Analysts see this as a positive step and expect a possible improvement in the balance sheet. The Company's progress is also reflected in its share price. Siemens Energy has recovered strongly in recent months and has doubled in value since the beginning of the year.
Despite these positive developments, there is a certain risk associated with the ongoing sale of the wind turbine division and the upcoming restructuring measures. Investors should, therefore, follow further developments closely and keep a critical eye on the Company's performance. If the wind energy segment is sold, the share will have to be revalued. The share is currently trading at EUR 24.82.
Carbon Done Right Developments - Receives 4th financing tranche
Carbon Done Right Developments is engaged in developing reforestation projects. The Company uses a technology platform that advances carbon monitoring while empowering smallholder farmers in developing countries. Through the use of artificial intelligence and data analytics, the accuracy of carbon sequestration is monitored from the tree level to the continental level, enabling transparency and trust in carbon offset projects. The focus is on the fair participation of landowners in the proceeds from carbon credits, creating a win-win situation. Carbon Done Right Developments brings technology and environmental protection together to create a sustainable future.
On April 16, Carbon Done Right Developments received the 4th tranche of funding for the Sierra Leone project, demonstrating progress on the project. The Company focuses on the reforestation of remote areas in Sierra Leone to generate income for landowners and reverse climate change. Transparency tools such as tree counters and the support of NGOs ensure fairness in the distribution of the value generated. With the goal of generating 1.7 million tons of carbon credits over 30 years, the Company has the opportunity to help many customers improve their carbon footprint.
With the planned acquisition of the London Carbon Exchange, the Company not only strengthens its position in the carbon credit market but also covers the entire value chain. They are introducing the innovative Carbon Quantification System (CQS™), which offers transparency that many competitors do not have. The London Carbon Exchange is used to trade carbon credits via a blockchain platform. This makes the certificates traceable and, therefore, more valuable. It also earns money from trading, which will become a profitable business in the coming years with a market worth billions. The share has been trading sideways between CAD 0.03 and CAD 0.06 since April and is currently available for CAD 0.04. With a market capitalization of around CAD 3.8 million, the Company is reasonably valued.
ThyssenKrupp - Decarbonization through hydrogen
ThyssenKrupp Steel is pursuing an ambitious plan to decarbonize steel production with the help of hydrogen with the aim of being climate-neutral by 2045. The most important part of this strategy is the conversion of the blast furnaces and the construction of an innovative direct reduction plant, which is expected to reduce CO2 emissions by up to 3.5 million tons per year. A demand of around 20,000 tons of green hydrogen is expected by 2026. These comprehensive measures are essential to replace the traditional blast furnace route and make steel production sustainable. This marks a significant step for the future steel industry.
The Company is in the midst of a comprehensive restructuring through the performance-oriented APEX program. The program aims to achieve the financial targets quickly and sustainably through restructuring and cost reduction measures. This realignment aims to position the Company as a leading provider of technologies for the green energy transition. The transformation process is already bearing fruit. The APEX program is 85% complete, and the Essen-based company has announced the reduction of steel production in order to meet the delivery volumes of the last three years.
In addition, a significant portion of the steel business has been sold to EP Corporate Group, and 55% of the ThyssenKrupp Industries India stake has also been sold. These measures are intended to strengthen the financial position and focus on high-growth businesses. Despite the challenges posed by cyclical fluctuations and the restructuring, CEO Miguel Lopez sees positive progress and expects financial improvements by 2025. Baader Bank also assumes this and has issued a "Buy" recommendation with a price target of EUR 16. The share is currently trading at EUR 4.53.
In summary, it can be said that each company under review wants to contribute to combating climate change. Siemens Energy may be looking to sell its wind business to achieve financial stability and improve its forecasts. Carbon Done Right Developments focuses on the development of carbon credits through reforestation projects that promote transparency and fair participation. ThyssenKrupp is pursuing a comprehensive plan to decarbonize steel production through the use of green hydrogen and is restructuring to be positioned as a leading supplier of technologies for the green energy transition.
Conflict of interest
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