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Lux Take on News: Weekly Round-Up September 17, 2021

Lux Research
September 17, 2021

Every day our researchers read through the top innovation headlines and provide their expert opinions on important developments and industry news. Our analysts then evaluate news based on potential importance ranking the developments from Truly Disruptive to Ignore.

On Fridays we highlight our Lux Take on the top news for the week. Check out our thoughts on the latest emerging technology and innovation news for the past week below. 

German government may provide Tesla with $1.35 billion to construct a battery manufacturing facility

Shishir Jairam, Research Associate, Lux Research

Shishir Jairam, Research Associate
Lux Take: Very Important


"After announcing various incentives and subsidies for local manufacturers, the German Ministry for Economic Affairs and Energy (BMWi) has now identified Tesla for a $1.35 billion grant to help build a new battery factory with an expected annual capacity of 100 GWh. Tesla has already applied for preapproval for the facility construction. Governments across Europe are looking to bolster opportunities for automakers and make Europe the next manufacturing hub; large cell manufacturers like CATL and SK Innovation have already announced GWh manufacturing facilities. With the push toward electrification at an all-time high, companies interested should note that if this grant is successful, then Tesla will have a majority market share in Europe.

Senate nixes Green New Deal, prohibits China materials purchasing, but funds $100 billion for grid upgrade

Michael Sullivan, Analyst, Lux Research

Michael Sullivan, Analyst
Lux Take: Very Important


"Although it is only about half of the $2.25 trillion Biden asked for, the $1 trillion U.S. infrastructure bill the Senate passed in August 2021 provides significant provisions for utilities, including direct payments from the federal government for producing clean electricity, broadly defined as nuclear and fossil fuel plants equipped with carbon capture and sequestration, wind, solar, and hydro. Other provisions for the power industry are the creation of a 2.5 cents/Wh production tax credit and a 30% grid improvement tax credit. Should the legislation pass, it will provide power firms the ability to leverage new incentives, far surpassing the nominal $1 billion to $2 billion the government spent annually on them over the past 10 years.

Siemens partners with Toray to use its membranes for multi-MW electrolyzer in Japan

Abhirabh Basu, Analyst, Lux Research

Abhirabh Basu, Analyst
Lux Take: Very Important


"Toray and Siemens received funding from the Japanese Ministry of Economy, Trade and Industry to demonstrate the largest PEM electrolyzer in Japan to date. Siemens will use Toray's hydrocarbon-based ion exchange membranes, which, according to the patent, are likely using a quaternary ammonium cation to improve stability in acidic conditions. The membranes are thinner (20 µm to 70 µm) and use a support that doesn't swell up, which adds to improving long-term performance. Siemens plans to test the membrane before building out a multi-MW PEM plant in Japan; however, with high renewable energy costs in the country, the cost of hydrogen production could potentially be a challenge for the project."

Indigo pays out carbon credits to more farmers, but connections to outcomes are not yet clear

Deepest Bista, Analyst, Lux Research

Deepesh Bista, Analyst
Lux Take: Very Important


"Indigo was among the first to provide payments to growers for carbon. It has now made payments to more than 250 growers, and its program includes about 3.3 million acres across 19 states and 15 crop types. Among participants, it has utilized 50 practice change combinations. The company is making some reasonable progress in soil carbon, but what did not come out of this latest data is the relationship between credits and SOC trends or co-benefits. It is too early to draw conclusions based on these early adopters, but understanding these and other outcomes is critical for an industry that thrives on traceability and transparency. Companies considering engagement must critically understand their connection to the credits they create or buy."

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DSM acquires dairy flavors company First Choice Ingredients for $435 million

Jamie Grippi, Senior Research Associate, Lux Research

Jamie Grippi, Senior Research Associate
Lux Take: Very Important


"The acquisition aligns with DSM's nutrition focus and will allow integration of First Choice's fermented dairy and dairy-based savory flavorings into its portfolio. The move will also accelerate First Choice's growth by helping distribute its products globally and enabling access to DSM's biotechnology toolbox, fermentation expertise, and expansive enzyme and culture strain portfolio. Companies should take note of partnerships that combine innovative, value-adding technologies from startups with the application, formulation, and nutrition expertise that are more common to established corporates to ultimately offer solutions with both high consumer appeal and optimized processing efficiencies."

Concerns about "overdiagnosis" of breast cancer using AI are unfounded and miss the point

Nardev Ramanathan, Ph.D., Senior Analyst, Lux Research

Nardev Ramanathan, Ph.D., Senior Analyst
Lux Take: Average Importance


"The use of AI in medical imaging for the diagnosis of breast cancer is seeing widespread adoption. Companies like Google and PathAI have shown impressive progress in detecting breast cancer, with high accuracy and low false positive rates. Concerns of "overdiagnosis" seem unfounded. While it is critical to evaluate any new technology carefully and assess potential health hazards, the use of AI for medical imaging is not merely hype. It has been around for years, and as of 2020, there are 29 FDA-approved AI/ML-based medical technologies. The points raised in the article also imply that AI diagnosis can override a doctor's assessment, when in fact it is a clinical decision support tool, helping the doctor but not replacing the doctor."

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Santos acquires Oil Search for $6.2 billion, becoming Australia's largest oil and gas company

Jinze Dai, Analyst, Lux Research

Jinze Dai, Analyst
Lux Take: Average Importance


"Three years after acquiring Quadrant Energy for $2.15 billion, Santos is making another strategic move to acquire Oil Search, a Papua New Guinea-focused oil and gas producer, which paves the way for Santos to become the top oil and gas company in Australia. As a result, the shareholders of Oil Search will own about 38.5% of the merged group, while Santos shareholders will hold around 61.5%. The merged group will become the top shareholder (42.5% stake) of the Papua New Guinea (PNG) LNG project, which supplies LNG to Asia's fast-growing markets. As natural gas is the key transition fuel to replace coal in Asia, companies should expect more frequent transactions and a rising valuation of high-quality natural gas assets in the near future."

Capturing growing carbon markets, Growmark and Indigo Ag join hands

Tim Appachanda, Ph.D., Senior Analyst, Lux Research

Tim Appachanda, Ph.D., Senior Analyst
Lux Take: Average Importance


"U.S. farmer-owned cooperative Growmark is partnering with Indigo Ag division Carbon by Indigo to help its farmer customers get started with carbon trading. Indigo Ag has been involved in carbon credit generation since 2019. The Growmark FS retailers will assist farmers with enrolling in Carbon and in doing so implementing agricultural practices that can reduce greenhouse gas emissions and sequester carbon. Indigo will facilitate the measurement and verification of regenerative farming practices and translate them into carbon credits. Companies need to keep a watch on growing voluntary carbon markets but recognize that partners with intricate understanding of the workflow are necessary to participate."

LanzaTech and Twelve partner for polypropylene from CO₂

Runeel Daliah, Senior Analyst, Lux Research

Runeel Daliah, Senior Analyst
Lux Take: Average Importance


"The exact details of the process remain undisclosed, but Twelve (formerly Opus 12) will likely use CO2 electrolysis to produce CO, which will then feed into LanzaTech's microbial technology for polypropylene. The combination of CO2 electrolysis and microbial conversion is also currently being explored by Siemens and Evonik through the Rheticus project – the main challenge to commercial viability remains securing a cheap source of electricity to produce affordable CO. The companies did not disclose any timeline for commercialization, but we don't expect any major scale-up developments in the next five years, as CO2 electrolysis is still in an early stage of development."

Did you miss last week's news round-up? Check out the blog here. Make sure you never miss a headline by subscribing to our newsletter.

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