India Won’t Be Giving Up On Fossil Fuels Any Time Soon

By Haley Zaremba - Aug 24, 2021, 3:00 PM CDT

India’s population is projected to grow to 1.52 billion people by 2036, expectedly surpassing China to be the world’s most populous country around 2031. Despite the fact that India’s growth rate is slowing considerably -- this decade’s growth rate is estimated to be the lowest since the nation’s independence from Britain -- it is growing all the same. The monumental size of the subcontinent means that India’s trajectory for development will have a massive impact on the rest of the world as the global community struggles to come together to mitigate the impacts of climate change.

In addition to the overall growth in population, there are important demographic changes taking place in India which will considerably increase the country’s role and impact in global greenhouse gas emissions, as well as the struggle to curb them and to develop new climate-smart technologies. More than half of the Indian population is on track to join the middle class. “In fact, because India’s demographics are much younger compared to China and the US, India’s middle class could be the largest in the world (in terms of numbers of people) by 2025,” the Financial Express reported earlier this year. While this bodes well for the livelihoods of millions of people, it also means an increased demand for a wide range of goods and services from legions of people. This translates to greater energy use and greater emissions. At present, India is the third-biggest carbon emitter in the world, following China and the United States. 

Unfortunately, India is not yet in a position to fulfill its growing energy needs with clean and renewable energy. As it stands, it will barely be able to keep pace with its increasing energy needs using all of the fuel sources, clean or unclean, available to it. “The sharp growth in energy demand anticipated over the next decade will make it imperative for India to ensure that oil and coal supplies grow accordingly, as renewable energy on its own may not be able to cater to the entire incremental demand, creating challenges in lowering emissions at the desired pace” S&P Global Platts reported last week. 

At present, petroleum represents around a quarter of India’s energy mix, while coal -- the dirtiest fossil fuel and the first fuel source that needs to be completely eradicated in the struggle to curb climate change -- represents nearly half of India’s energy consumption. The rate of consumption of oil and coal are only expected to grow in the coming years. India is currently investing in increased production capacity for oil, gas, and coal and will continue to do so for the foreseeable future. "Global energy outlooks by agencies across the board, post and prior to the pandemic have pointed out that India would be the leading energy and oil demand growth driver over the long term,” Indian Oil Corp. chairman Shrikant Madhav Vaidya was quoted by S&P Global Platts. “And none of these have been changed by the pandemic. There is a need to bridge the energy access deficit in the country."

Related: ‘Skimming Stones’ Pattern Shows Wall Street Is Wrong About Oil

In addition to representing a potentially outsized threat to climate goals, India also stands to suffer disproportionately from the adverse impacts of climate change. In South Asia, many human-created weather changes have now become “locked in” according to the Intergovernmental Panel on Climate Change (IPCC). These irreversible impacts include increased heat waves and humid heat stress which pose a threat to human life as well as their greater ecosystems. India is already on the list of 17 severely water-stressed countries, and will likely acutely suffer from climate refugees as people are forced to leave untenable living conditions. 

In a cruel irony, many of the poorest countries which have contributed the least to greenhouse gas emissions stand to carry the burden of global warming’s heat waves, droughts, rising sea levels, and extreme weather events earlier and most acutely. India is no exception. While the subcontinent’s impact on climate change is growing and worrying, it continues to have a smaller relative ecological impact than many developed countries. Per capita, India’s contribution to greenhouse gas emissions pales in comparison to the United States, for example.

At the same time, India can and must do more to mitigate its impact and refocus the trajectory of its development in a more climate-smart direction. While India has met its climate targets as proposed at the Paris climate agreement, this confirms that those targets were not sufficiently ambitious. India must set -- and keep -- much more stringent climate goals as this month’s UN climate change report sounds a code red for humanity. 

Petroleum liquids account for 25% of India's energy basket, and coal as much as 45%. Analysts told S&P Global Platts that India will be looking to pursue its planned refinery expansions as well as its coal-fired power projects, a sign that there is still scope for demand growth for both oil and coal in the foreseeable future.

"Global energy outlooks by agencies across the board, post and prior to the pandemic have pointed out that India would be the leading energy and oil demand growth driver over the long term. And none of these have been changed by the pandemic. There is a need to bridge the energy access deficit in the country," Indian Oil Corp. chairman Shrikant Madhav Vaidya told Platts recently.

S&P Global Platts Analytics expects India's oil products demand to grow by an average of around 250,000 b/d every year over the next decade, supported by population growth and a steady rise in disposable personal incomes.

The International Energy Agency recently said that India could witness the biggest increase in energy demand in the world over the next 20 years, with the potential for oil consumption rising as high as 4 million b/d to 8.7 million b/d by 2040. The group also said that a stronger push for electrification, efficiency and fuel switching could limit oil demand growth to under 1 million b/d over the same period.

Indian policy makers have said that the country's oil demand is expected to double by 2040 and it will look to boost refining capacity from the current 250 million mt/year to 450 million mt/year.

Some key challenges

Roman Kramarchuk, Platts Analytics head of scenarios, policy and technology analytics, said a key challenge for India is the fact that 70% of its CO2 emissions come from burning coal, predominantly in the power sector.

"India is clearly not facing the situation in some Western economies and regions where power demand is flat or even dropping," he said.

Platts Analytics Global Integrated Energy model expects India's annual electricity demand growth to average 4.4% over 2020-2030.

"Building non-emitting new capacity to meet this new demand will be a challenge, with these strains further exacerbated if India were to push to cut back generation from coal plants," Kramarchuk added.

The country's coal power capacity, presently at 203 GW, is projected to grow to 220-230 GW by 2025 or sooner with the commissioning of under-construction plants being offset by end-of-life closures, said Vibhuti Garg, Energy Economist at the Institute for Energy Economics and Financial Analysis. The growth in coal consumption is meant to meet rising demands from industries, a per capita rise in energy consumption and increased connectivity of villages to the grid, industry sources said.

Industrial coal demand is expected to remain firm as cement, power and steel companies are dependent on coal with a lack of affordable alternatives, sources said.

With the power load factor -- a measure of efficiency of electricity use -- in India below 60% since 2018-2019, coal-powered plants would run their plants for longer to make up for the cost of setting them up, sources said.

"A set up power plant has a shelf life of 25-30 years and currently power load factor is less than 60%. So, when one considers plants set up in last few years and [those] already being set up, the dependence on coal is not going to come down drastically," said Vasudev Pamnani, director at Lavi Coal Info Private Ltd.

The carbon factor

India's reliance on coal is also dependent on the affordability of renewable energy and the availability of energy storage technology as power purchase agreements start expiring, Garg said.

The country's dependence on coal has a unique impact on the generation of carbon credits.

As calculation of credits takes into account baseline emissions, a solar or hydro power project in India has more potential for credits due to the factor of additionality -- emissions reductions that would not have occurred in the absence of the market for carbon credits.

"Because our power is so dependent on coal, when a company into electric mobility starts getting into carbon credits, then global carbon standards like Verra say your credits will reduce as your electricity is coal-generated and so the source isn't clean," said Vasudha Madhavan, Founder, Ostara Advisors, an Indian electric-mobility-focused investment bank.

As per EIA studies, one metric ton of coal with a carbon content of 78 percent and a heating value of 14,000 Btu per pound will generate 2.86 metric tons of carbon dioxide when burnt completely.

Ashish Govil, co-investor at CO2TKN, a carbon credit blockchain tech company, said India needs to move towards renewable energy quickly to attract ESG funding at very attractive rates in order to build green energy projects.

By Haley Zaremba for Oilprice.com

The Dream of Carbon Air Capture Edges Toward Reality


Fans draw air into Climeworks’ direct air capture plant in Zurich, Switzerland. CLIMEWORKS

Next month, an industrial facility in Iceland will join a growing number of projects to remove CO2 from the air and put it underground. But major hurdles, including high costs, remain before this technology can be widely deployed and play a key role in tackling climate change.

BY JON GERTNER • AUGUST 25, 2021

In early September, at an industrial facility located about 25 miles southeast of Reykjavik, Iceland, the Swiss company Climeworks will mark the opening of a new project named “Orca.” At least in a conventional sense, Orca doesn’t actually make anything. It is comprised of eight elongated boxes that resemble wood-clad tanks. Each of these boxes — known as “collectors” — is roughly the size of a tractor trailer, and each is festooned with 12 whirring fans that draw a stream of air inside. Within the collectors, a chemical agent known as a sorbent will capture CO2 contained in the air wafting through. Periodically, the surface of the sorbent will fill up. And at that point the CO2 trapped within it will need to be released. At Orca, this task is accomplished with a blast of heat, which is sourced from a nearby hydrothermal vent. The extracted CO2 will then be piped from the collector boxes to a nearby processing facility, where it will be mixed with water and diverted to a deep underground well.

And there it will rest. Underground. Forever, presumably. The carbon dioxide captured from the Icelandic air will react with basalt rocks and begin a process of mineralization that takes several years, but it will never function as a heat-trapping atmospheric gas again.

Climeworks maintains that Orca, once it’s running around the clock, will remove up to 4,000 metric tons of CO2 from the atmosphere each year. And there isn’t much reason to doubt the facility can achieve this feat. For one thing, the technology for the plant, known as direct air capture, or DAC, is a variation on ideas that have been utilized over the course of half a century in submarines and spacecraft: Employ chemical agents to “scrub” the excess CO2 out of the air; dispose of it; then repeat. More to the point, perhaps, is the fact that Climeworks has already built smaller, less sophisticated plants in mainland Europe, which have in turn pulled hundreds of tons of CO2 per year from ambient air.

“We are out of academic research and feasibility and into engineering reality,” says one company executive.


What seems most significant about Orca, then, is how it represents the possibility that direct air capture has moved closer to something resembling a commercial business. Climeworks now has dozens of customers — individual consumers who have purchased carbon removal services directly from the company, as well as corporations, like the insurance giant Swiss Re — who will pay for the permanent carbon offsets that will be buried underneath Icelandic soil. What’s more, the Orca facility will be the largest functioning direct air capture plant in the world to date — by the company’s estimation, it represents a “scale-up” of its carbon removal efforts by about eighty-fold over the course of four years.

And yet, Climeworks and Orca will likely soon be eclipsed. Plans for even larger DAC plants — one in the U.S. Southwest, slated for completion at the end of 2024; another in Scotland, to be finished about a year after the American project — will be built by a competitor, Carbon Engineering, of British Columbia. Employing a somewhat different technology, Carbon Engineering’s facilities, as initially planned, will be powered by renewable energy and will eventually each remove, on net, about a million metric tons of carbon dioxide a year from the atmosphere.

“In our view, this will decisively answer the question: Is direct air capture feasible at large scale and affordable cost,” Steve Oldham, the CEO of Carbon Engineering, told me recently. “As I see it, we are out of academic research and feasibility and now into engineering reality.”



Climeworks’ Orca plant under construction near Reykjavik, Iceland. CLIMEWORKS


One way to consider the global value of these efforts is to place them within the humbling math of climate change. In the most recent report by the Intergovernmental Panel on Climate Change (IPCC), a number of models were used to chart possible future emissions scenarios, and to make sense of how we might experience a rise of, say, 1.8 degrees C or 2.5 degrees C (3.2 degrees F to 4.5 degrees F) by the year 2100. Last year, about 31 billion metric tons of carbon dioxide were released into the atmosphere. Probably that number will rise even higher this year, as the global economy begins to recover from the Covid-19 pandemic. But to have a chance at limiting warming to 2 degrees C we would have to effectively bring our emissions near to zero by around the middle part of this century.

Without question, the best way to begin doing so is to drastically transform our electrical, transportation, and industrial systems to emissions-free energy sources and processes. However, we may need to actively compensate for economic sectors — air travel, for instance, or steel production — that prove too hard to rapidly decarbonize. This would mean we would have to actively take CO2 out of the atmosphere at the same time. Our carbon removal efforts could involve natural means, such as sequestering atmospheric CO2 in soil or new forests. But we could also utilize more technological approaches, such as DAC or bioenergy with carbon capture and storage — known by the acronym BECCS—which involves growing plants, burning or fermenting them for energy, and then capturing the CO2 emissions and burying them.

And here the numbers get daunting. Zeke Hausfather, a climate scientist at the nonprofit Berkeley Earth involved in charting possible emission pathways for the IPCC report, told me that in one of the most optimistic scenarios, which limits temperature rises to 1.5 degrees C by 2100, the conditions require massive mitigation efforts as well as about 17 gigatons — that’s billions of tons — of CO2 removal per year by the end of the century. And as much as planting trees might seem an ideal solution to help us reach such a goal, new forests are likely not a sufficient or durable carbon removal solution, especially in the wake of huge wildfires in Siberia and the American West. “Natural ways of removing CO2 are generally less desirable than long-term geologic storage through BECCS or DAC,” Hausfather says, adding that this is because storing carbon above ground in biomass is most likely temporary.

Whether direct air capture “scales up” and makes a significant climate impact depends mainly on its expense.


Whether DAC can make a meaningful contribution to carbon removal goals remains a lingering question. But the new Climeworks and Carbon Engineering plants suggest significant progress, not just hype. “You’ve got these two companies that are ready to go today,” Jennifer Wilcox, an official at the U.S. Department of Energy (DOE) and an expert in carbon capture technologies, told me. “But the question is, how do they get from thousands of tons to millions of tons?’” After that, of course, comes an even bigger question: Could they actually get to billions?


In several instances over the past few years, in the course of reporting on climate solutions and carbon removal strategies, I’ve been told by venture capitalists — investors I respect for their grasp of technology, and who have a deep understanding of climate change — that direct air capture could turn out to be among the world’s biggest industries by midcentury. I would not be shocked if this turns out to be true. On the other hand, even modest growth of the DAC industry seems entirely conditional. Reducing emissions — a Herculean task for the world’s governments and industries as they begin to phase out fossil fuels — remains the primary challenge. And beyond that, whether DAC “scales up” and makes a significant climate impact depends mainly on its expense. Or to put it another way: How much will it ultimately cost to separate a metric of ton of CO2 from the air and put it into the ground, or into a long-lasting product like concrete or carbon fiber? It seems a matter of consensus that if it can get nearer to $100 per ton, direct air capture might become an essential and useful technology.

But we’re still not sure. A few years ago, Climeworks executives told me their cost of direct air capture was somewhere between $500 and $600 per ton. The company is not publicly estimating — and indeed may not yet know — how much the Orca plant will improve on that measurement. Still, there are physical and thermodynamic limits, according to the DOE’s Wilcox, that can help serve as a lower bound. Wilcox surmises that scientific constraints may make it difficult for Climeworks or Carbon Engineering plants to get much below $100 per ton to remove carbon from the air. And this may remain the case no matter how hard engineers work in the future to bring down expenses through cheaper materials and assembly-line industrialization. A recent analysis of the industry, authored by scientists at Carbon Engineering, predicts a similar outcome: An eventual cost range for DAC of between $94 and $232 per ton. That could be decades away — or it may never come to pass.



A rendering of Carbon Engineering's direct air capture plant planned in West Texas, which would be the largest such facility in the world. CARBON ENGINEERING LTD.


The point of new plants like Orca or Carbon Engineering’s mammoth project in the Southwest, however, isn’t to perfect the carbon removal process. The point is to take a large technological and commercial step forward. We can only speculate on what DAC technology may achieve next based on the future targets of executives at carbon removal companies. But if costs reach, say, $400 or $350 per ton in the next few years, it would suggest this remains a promising tool in need of further refinement. It may indicate this could prove to be a viable option for companies like airlines, say, or fertilizer manufacturers (or even for government entities) that may eventually be compelled to buy offsets so as to compensate for their carbon emissions.

ALSO ON YALE E360

Climate solutions: Is it feasible to remove enough CO2 from the air? Read more.


It’s probably best to interpret the opening of the new plants as the start of a complex, multi-decade, global deployment process that follows years of research and development. “We’re confident our costs will continue to fall,” Oldham, the Carbon Engineering CEO said. “But only if we deploy. If you never deploy, your costs never go down.”

Oldham’s view, moreover, is that the world might, through epic efforts at mitigation, be able to eliminate 70 to 80 percent of emissions by 2050. “But that would leave about 20 to 30 percent of the carbon footprint we’re going to have to remove,” he says — probably the equivalent of about 10 to 12 billion tons per year of CO2. As a thought experiment, that would require 10,000 Carbon Engineering plants like the ones the company is now planning. “I think if the world sets its mind to it, we can produce many of these plants,” he said. “And we’ve done this in the past. Look at the way we scrambled for Covid vaccines. Or look at the way we scrambled for wars and got into the mass production of planes.”

A key question is whether direct air capture eventually mimics the astonishing cost declines of solar PV panels.


One concern is that DAC might prove increasingly controversial if it erodes global efforts at mitigation. If carbon can effectively and affordably be removed from the air, in other words, it may slow the rush to eliminate fossil fuels. For now, at least, that remains a hypothetical risk. And Oldham and colleagues in his field told me they believe new state and government policies are moving his industry in the right direction. A U.S. tax credit for companies called 45Q, for instance, is helping to subsidize some of the high costs of carbon capture and sequestration. The possible passage of a federal infrastructure bill in the coming months may likewise allocate as much as $3.5 billion to help construct large DAC plants. Meanwhile, a push from the private sector has been a boon to fledgling DAC firms. A slew of tech companies interested in becoming carbon neutral or carbon negative — Microsoft, Stripe, and Shopify are the most prominent — have invested substantial sums in Climeworks and Carbon Engineering. Their commitments have, in turn, helped the companies move forward with planning and construction.

At the same time, investment dollars are beginning to flow into “next generation” DAC ideas. The U.S. Department of Energy recently invested more than $12 million in a slew of early-stage approaches and component technologies. A number of venture firms, notably Breakthrough Energy and LowerCarbon Capital, have placed tens of millions more into startups. One new firm, San Francisco-based Noya, utilizes existing power plant cooling towers to create a “distributed” system of direct air capture stations that the company hopes will prove cheaper than building DAC plants from scratch; another, a Detroit-based startup known as Remora, fits carbon-capturing sorbent technology on trucking rigs to vacuum up CO2 on long hauls. As a sweetener, a new $100 million X-prize, sponsored by Elon Musk, involves a four-year global competition that will reward the most promising young carbon removal firms for ideas that can be scaled up to gigatons per year.

So within the industry, there is plenty of money and plenty of enthusiasm. What is in short abundance, in light of the hottest month on record and near-term projections for future global temperatures, is plenty of time.

At this stage in DAC’s evolution, it’s worth recalling that it can be notoriously hard to predict how long it takes for technologies to mature. In the mid-1950s, just after the first practical photovoltaic solar cell was invented at Bell Labs in New Jersey, one of its inventors, Daryl Chapin, calculated it would cost around $1.5 million to deploy the devices as an electricity source on a typical American house. Nowadays, you can outfit a home with solar panels for around $20,000, according to the Solar Energy Industries Association — and that investment pays off over time through the benefit of cheaper electric bills. In some locations, solar PV is now the cheapest source of energy on the planet.



Carbon Engineering’s direct air capture pilot plant in British Columbia. CARBON ENGINEERING LTD.


The future challenge for direct air capture technologies — the uncertain, downward arc of its cost — is therefore a familiar one. One possible future is that the DAC industry will continue to reduce expenses but may not get near enough to a price structure, such as $100 per ton, that makes it economically appealing as an offset. To Klaus Lackner, a pioneer in the direct air capture field who runs the Center for Negative Carbon Emissions at Arizona State University, an essential question is whether DAC, as it evolves, mimics the astonishing cost declines of solar photovoltaic panels and wind turbines, or whether it remains a boutique technology that crashes into inherent economic limits.

“My opinion is that if it behaves like many other mass manufactured technologies, it is not unreasonable to assume that by growing roughly 300-fold, we should be skirting $100 per ton for carbon removal,” Lackner says. “Beyond that, my crystal ball is a little cloudy. But if this keeps growing a thousand-fold, we should be at $50, or maybe $70 or $80 per ton.”

Lackner believes that DAC may actually be at a better stage than solar photovoltaics were during, say, the 1970s, when prices were prohibitively expensive. For widespread adoption, solar technology needed to reduce costs by about 100 times, he says. DAC needs only to reduce costs by 10 times to make it desirable. He acknowledges there is no guarantee that DAC will succeed in the same way as it scales up. And he warns that even if direct air capture costs drop dramatically, the world will still need a regulatory framework for its application, so as to make a significant impact on the climate. As crucial as it may be to improve the technology, it will be equally important to compel industries and governments “to treat CO2 as a waste product,” he says, and therefore pay to clean it up.

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Why green groups are split on subsidizing carbon capture technology. Read more.

In light of this, the next few years should be telling. We may soon know whether DAC is a go—or whether the technology, often viewed by its critics as quixotic, will hit a wall of inefficiency. If it’s the former, we will have a useful tool in the climate toolbox. But if it’s the latter, it will almost certainly make the goal of achieving a livable world more complicated. The work ahead of us, already monumental in its political, technological, and economic challenges, would become even more difficult.


Jon Gertner is a journalist and historian whose stories on science, technology, and nature have appeared in a host of national magazines. Since 2003, he has worked mainly as a feature writer for The New York Times Magazine. His new book, The Ice at the End of the World, chronicles 150 years of exploration and discovery on the Greenland ice sheet. Gertner lives with his family in New Jersey. MOREABOUT JON GERTNER →

AUSTRALIA

Santos sued for ‘clean fuel’ claims and net zero by 2040 target despite plans for fossil fuel expansion

Australian oil giant is being accused of trying to ‘greenwash’ their operations to appeal to investors

An activist group says they believe Santos, Australia’s second largest independent oil company, ‘intends to produce oil and gas beyond 2040’ despite its net zero emissions claims. Photograph: Jason Reed/Reuters


Royce Kurmelovs
@RoyceRk2
Thu 26 Aug 2021 

A shareholder activist group is taking Australian oil company Santos to court over its claims it produces “clean fuel” and plans to reach net zero emissions by 2040.

Papers were filed against Santos – Australia’s second largest independent oil company – on Thursday by the Environmental Defenders Officers acting on behalf of the Australasian Centre for Corporate Responsibility.

Court documents make two claims against the company; the first concerning statements Santos made in its 2020 annual report where it claimed natural gas is a “clean fuel” that provides “clean energy”.


NSW bushfire survivors win legal battle ordering EPA to take action on climate crisis

ACCR argues this is a misrepresentation as the extraction of natural gas involves the release of “significant quantities of carbon dioxide and methane into the atmosphere”.

The second part of the lawsuit takes aim at statements by Santos that it had a “clear and credible” plan to achieve net zero emissions by 2040 by relying on carbon capture and storage (CCS).

ACCR argues reliance on CCS to achieve net zero is not credible as Santos has made “a range of undisclosed qualifications and assumptions about CCS processes” while also seeking to massively expand the extraction of fossil fuels over time.

Dan Goucher, ACCR’s Director of Climate and Environment, said the litigation was important to challenge oil and gas companies where it appears they are trying to “greenwash their operations”.

“We read annual reports and sustainability reports from a range of companies every day. And some of these claims are completely unjustified,” Gocher said. “The key point for us I guess is that it’s become very difficult for any investor to differentiate between companies making genuine claims and companies that are not genuine.”

“This litigation is trying to debunk those more spurious claims.”

Gocher said that both institutional investors and retail investors implicitly trust statements made by companies in their corporate documents and that it was important these are truthful.

“I’d say there’s a fairly significant number of Santos shareholders that are convinced its actions are genuine. We don’t believe they are genuine,” Gocher said. “They intend to produce oil and gas beyond 2040.”

Santos was contacted for comment but a spokesperson for the company said “it would not be appropriate for Santos to comment on matters before the court”.

Dr Laura Schuijers, a senior research fellow with the University of Melbourne, said the direct challenge to Santos makes it “one to watch” following a string of recent climate change related litigations.

“Big oil and gas companies are in the spotlight at the moment,” Dr Schuijers said. “The risk of being sued, litigation risk, is already significant enough. People don’t want to invest in companies that are potentially seen to be a liability.”

As the legal pressure mounts others are now calling on the finance sector to step up.
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On Thursday, environmental finance group Market Forces published an analysis showing Australian super funds have pulled $2.5bn from high carbon emitting companies like BHP, Woodside and Santos since 2018.

The figure was obtained by calculations using disclosure documents from 10 of the largest 30 super funds to check their equity holdings for investments in 23 fossil fuel companies.

Extrapolated across the entire sector, it was estimated $5bn had been pulled from oil companies since 2018 – a figure Wil van der Pol from Market Forces said was a good start but needed to happen faster.

“Any company pursuing fossil fuel expansion doesn’t deserve any support from Australian super funds,” van der Pol said. “We’d like to see the flight of capital from these companies turn from a solid trickle to a raging torrent.”

HYDROGEN H2

Hydrogen: fuel of the future? | The Economist

Aug 25, 2021

The Economist

It’s been hailed as fuel of the future. Hydrogen is clean, flexible and energy efficient. But in practice there are huge hurdles to overcome before widespread adoption can be achieved. 00:00 How hydrogen fuel is generated. 02:04 How hydrogen fuel could be used. 02:46 Why hydrogen fuel hasn't taken off in the past. 03:40 Is hydrogen fuel safe? 04:31 Hydrogen's advantage over batteries. 05:00 How sustainable is hydrogen fuel? 06:13 Why the hype about hydrogen may be different this time. 

Find The Economist’s most recent coverage on climate change: https://econ.st/3zCt2uW

 

Linde says it will triple the amount of clean hydrogen production by 2028

By Joanna Sampsonon Aug 27, 2021

Translate NEWS


Linde will invest more than $1bn in decarbonisation initiatives and triple the amount of clean hydrogen production by 2028, the industrial gas giant has set out in its 2020 Sustainable Development Report.

Published today (August 27), the report highlights that Linde is investing across the hydrogen value chain to accelerate the clean energy transition.

Linde says it will pursue competitive low-carbon sources of hydrogen, including energy-efficient steam methane reformers (SMRs) with carbon dioxide capture, electrolysis with renewable power and piloting new low-carbon technologies.

Grey and blue hydrogen are “important stepping-stones” on the path to green hydrogen, the Hydrogen Council member says in the report, as they “allow the necessary frameworks and infrastructures to be developed” while green hydrogen reaches the “necessary scale”.


Clean hydrogen is a cornerstone of Linde’s clean energy strategy.

The firm says it has the largest liquid hydrogen production capacity and distribution system in the world today and it also operates the first commercial high-purity hydrogen storage cavern.

Linde also has around 200 hydrogen stations and 80 hydrogen electrolysis plants worldwide.

Read the report in full here.

How Linde is scaling up to serve the growing hydrogen mobility market in North America


© Linde

Linde is currently in the process of retrofitting its Ontario, California plant to produce green hydrogen to fuel the US state’s mobility market. Targeting the second quarter of 2021 for full commercialisation, the facility will manufacture green hydrogen using renewable methane, in addition to producing conventional hydrogen.

With this investment, the US-German industrial gas giant will be able to initially produce 2.6 metric tons of green hydrogen per day – enough to fuel up to 1,600 vehicles a day – helping to avoid up to 50,000 metric tons of carbon dioxide per year. As demand for green hydrogen grows, Linde plans to expand its capacity accordingly, and revealed to H2 View that the US mobility market is a big focus for the company.

Read the full article here.

Hyundai to show next-generation fuel-cell systems, hydrogen society ideas

 STEPHEN EDELSTEIN 

AUGUST 27, 2021 

Hyundai plans to host a "global forum" called Hydrogen Wave on September 7, with the goal of showcasing next-generation fuel-cell systems, and promoting different uses for fuel-cell tech.

The online event will present Hyundai's "vision for a future hydrogen society," according to a company press release. Hyundai said it will showcase fuel-cell vehicles, as well as other applications for fuel-cell tech.

Three short teaser videos provided hints of what the reveals might be. One showed a car lapping a racetrack in the black-and-white camouflage typical of auto-industry prototypes. The second showed what appeared to be a fuel-cell truck, and the third seemed to focus on hydrogen distribution. It's another manifestation of Hyundai's eagerness to find uses for fuel cells beyond passenger cars.


Teaser for Hyundai Hydrogen Wave event


Hyundai has been a strong advocate of a future hydrogen economy, and it launched an HTWO fuel-cell brand last December, and this event is likely going to expand on what exactly that means.

We do know that Hyundai plans to test fuel-cell semi trucks in California. Last month, the automaker announced a 12-month pilot program using two trucks, which will be followed by the rollout of a 30-truck fleet in the second quarter of 2023.

To distribute hydrogen, Hyundai is also considering ideas that use existing infrastructure, like transporting hydrogen in oil.

However, Hyundai's only fuel-cell passenger vehicle is the Nexo crossover SUV, which is only available through a handful of California dealerships. Lack of infrastructure has proven challenging for the Nexo and other fuel-cell cars, and that provides more incentive for Hyundai to find other uses for fuel cells.

Hydrogen now firmly at the heart of the global race to net zero — for better or worse

New policy announcements by the US, EU, UK, India and Russia show that major economies are getting serious about H2, but are they getting it right? asks Leigh Collins

LONG READ



National hydrogen strategies, according to Recharge analysis.Photo: Recharge

26 August 2021 10:48 GMT UPDATED 27 August 2021 11:48 GMT
By Leigh Collin

Four years ago, when Recharge began writing about clean hydrogen, it was little more than a fringe idea being discussed by forward thinkers rather than policy makers.

But today — after a series of recent announcements — countries accounting for more than a third of the world’s population (2.7 billion people) now have hydrogen strategies in place, putting the gas firmly at the heart of the global race to reach net-zero emissions.


Hydrogen: hype, hope and the hard truths around its role in the energy transition
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August has been an extraordinary month for hydrogen. National strategies were officially announced by India, the UK, Russia and Colombia, while the US introduced a preliminary national hydrogen strategy by the back door — buried in the giant 2,702-page bipartisan infrastructure bill that was passed by the country’s Senate.

And in mid-July the European Commission unofficially expanded its existing hydrogen strategy — unveiled in July 2020 — through its Fit for 55 package.


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All of this adds to the national hydrogen plans already announced by Japan, South Korea, Canada, Australia, Chile, Norway, Germany, France, Spain, the Netherlands and Portugal, while China, Brazil, Turkey, New Zealand, Ukraine and Oman are also working on their own H2 programmes.

So what do the new strategies actually say? Would the hydrogen be green or blue, or some other hue? How would the H2 be used? Are governments going to commit to the potentially expensive and inefficient use of H2 in cars and heating? And when will the mass manufacturing of clean hydrogen actually take off?
US: ‘Let the market decide’

The landmark $550bn Infrastructure Investment and Jobs Act — passed by the US Senate last month, but yet to be signed off by the Democrat majority in the House of Representatives — assigns $9.5bn of federal cash to the hydrogen sector and spells out an aim to reduce the cost of green H2 to less than $2/kg by 2026 (from more than $5/kg today).

It also creates four regional clean hydrogen hubs, which the bill defines as “network[s] of clean hydrogen producers, potential clean hydrogen consumers, and connective infrastructure located in close proximity... that can be developed into a national clean hydrogen network to facilitate a clean hydrogen economy”.

The bill requires the Energy Secretary — a position currently held by Jennifer Granholm — to solicit proposals for these hubs within 180 days of the bill’s enactment.

US President Joe Biden speaks during a virtual meeting with governors, mayors and local officials on the Infrastructure Investment and Jobs Act. Photo: AFP/Getty

Significantly, the bill also calls upon the Energy Secretary to select at least one hub proposal from each of three clean-hydrogen production routes: fossil fuels (with carbon capture and storage), renewables, and nuclear energy — also known as blue, green and pink H2, respectively.

Also, each of the hubs should demonstrate different uses of clean hydrogen: power generation, industrial manufacturing, residential and commercial heating, and transportation.

The US is therefore taking a “let the market decide” approach to the production and usage of “clean” hydrogen, despite recent evidence suggesting that blue H2 would be bad for the climate due to upstream methane emissions.

These criteria are not set in stone, however, as the bill merely requires the Energy Secretary to meet them “to the maximum extent practicable”.

The infrastructure bill also authorises the Energy Secretary to spend $500m over the 2022-26 financial period on multi-year grants — and contracts with companies and organisations — to advance clean hydrogen research, development and demonstration projects, including for production, processing, delivery, storage or usage of the H2.


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The priority here, the bill states, is to increase the efficiency and cost-effectiveness of clean-hydrogen technology.

A further $1bn will be spent on grants and contracts as part of a research, development, demonstration, commercialisation and deployment programme that aims to cut the cost of hydrogen produced from electrolysers to less than $2/kg by 2026 — as well as “any other goals the [Energy] Secretary determines”.

This is a huge amount of money that could be used to fund giant factories that reduce the cost of electrolysers simply through economies of scale, or to develop new efficient technologies.

However, the lion’s share of the cost of renewable H2 is the price of the energy used to split the water molecules into hydrogen and oxygen, so reducing the cost of electrolysers on its own would almost certainly not be enough to hit the $2/kg figure. So the funding could be used to directly subsidise green H2.

The bill also requires the Energy Secretary to submit to Congress a “technologically and economically feasible national strategy and roadmap to facilitate widescale production, processing, delivery, storage, and use of clean hydrogen” within 180 days of the act passing. These will include interim goals and be updated at least once every three years.

Again, this gives significant leeway to Granholm, who could decide that using hydrogen for cars or heating is not economically feasible, as many independent analysts argue.

And in what could be seen as a new global standard, the bill makes a clear definition of “clean hydrogen” — as H2 “produced with a carbon intensity equal to or less than 2 kilograms of carbon dioxide-equivalent produced at the site of production per kilogram of hydrogen produced”.

The words “at the site of production” would be music to fossil-fuel industry ears as it does not include the upstream methane emissions that massively increase the greenhouse gas footprint of blue hydrogen.


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Grey hydrogen, produced from unabated natural gas or coal, emits 9-12kg of CO2 for every kilogram of hydrogen. Roughly speaking, this would mean that 80-90% of the CO2 emitted from steam methane reforming or coal gasification would need to be captured and stored indefinitely to meet the criteria for clean H2.

With blue hydrogen proponents such as Norwegian energy giant Equinor aiming to capture 95-99% of emissions, so the 2kg/CO2e figure is a low bar for the fossil-fuel industry.

UK: 5GW by 2030

The UK government finally launched its long-awaited hydrogen strategy on 17 August, which includes proposals to use a “contracts for difference” (CfD) subsidy mechanism similar to the one used to kick-start the nation’s rapidly expanding offshore wind sector.

Since the CfD was introduced in 2015, the cost of offshore wind from UK waters has reduced by two thirds.

Prime Minister Boris Johnson’s administration hopes to mirror that as it builds 5GW of “clean” hydrogen capacity — green or blue — by 2030, to be used in industry, transport and heating.

British ministers seem intent on using hydrogen in the existing natural gas network for heating, despite the massive costs of converting pipelines to cope with the smaller molecule, including metal gas pipes hidden in walls or under floorboards in people’s homes — not to mention the inefficiency of H2 boilers compared to electric heating solutions such as heat pumps. So hydrogen heating would be far more expensive to consumers than electric solutions.

Prime Minister Boris Johnson with energy secretary Kwasi Kwarteng on a visit to the Moray Offshore Windfarm East, off Scotland

 Photo: Getty

The strategy states that the government will undertake a review to support the development of transport and storage infrastructure and will assess the safety, technical feasibility and cost effectiveness of mixing hydrogen into the existing gas supply.

But much of the strategy pushes a lot of the key decisions into the future, with action only being taken after consultation with the public and industry.

The government wants to collaborate with industry to develop standards to give certainty to producers and users that the hydrogen the UK produces is consistent with net zero. Emissions from blue hydrogen would therefore have to be offset by tree planting or carbon capture.

Ministers will also consult on the design of a £240m ($331m) Net Zero Hydrogen Fund, which aims to support the commercial deployment of new low-carbon hydrogen production plants across the UK.

A hydrogen sector development action plan will be launched in early 2022 setting out how the government will support companies to secure supply-chain opportunities and jobs.

India: Mission quantum leap

Prime Minister Narendra Modi used his annual Independence Day speech on 15 August to launch India’s National Hydrogen Mission, declaring that green H2 produced from renewables would help the nation make a “quantum leap” to energy independence by 2047.


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“We have to make India a global hub for green hydrogen production and export,” he said. “This will not only help India to make new progress in the field of energy self-reliance but will also become a new inspiration for clean energy transition all over the world.”

Such high-profile backing of renewable hydrogen is a hugely important signal to potential investors, but Modi’s speech lacked details.

However, a few days earlier, India’s power and renewable energy minister RK Singh announced plans to compel oil refineries and fertiliser plants to use green hydrogen.

The draft policy — which has been sent for cabinet approval — will force oil refiners to use at least 10% green H2 in their overall hydrogen consumption from 2023/24, rising to 25% by the end of the decade, it was reported.

The fertiliser sector would have to use 5% renewable hydrogen by 2023/24 and 20% by 2030.

About 98% of the 70 million tonnes of hydrogen currently used each year by oil refiners, fertiliser producers and chemical manufacturers is currently grey — ie, produced from unabated natural gas or coal. Which is why analysts have long argued that grey hydrogen needs to be replaced with green or blue H2 before scaling up the use of hydrogen in other sectors such as transport.
Russia: Eyeing exports

Prime Minister Mikhail Mishustin unveiled Russia’s “concept” for hydrogen development on 6 August, with an aim of becoming one of the largest exporters of clean H2 — mainly the blue variety — to Europe and Asia.

He also alluded to the reason behind the new hydrogen strategy — namely, that the hydrocarbon-reliant Russian economy would otherwise lose billions of dollars in oil & gas sales as the world strives for net-zero emissions.

“Hydrogen energy will reduce the risks of losing energy markets and support economic growth through development of new production facilities, as well as the creation of high-tech jobs, and the export of products and technologies,” said Mishustin.


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The 25-page “concept” document sees the Russian hydrogen industry being built up over several stages between now and 2050.

The first stage up until 2025 will involve the creation of at least three hydrogen hubs in different parts of the country and the implementation of pilot projects for the production and export of H2, as well as the use of the gas in the domestic market.

The pilot projects under this initial stage will likely focus on the production of blue hydrogen, making use of Russia’s vast gas resources combined with carbon capture and storage technology — although the draft concept also includes potential electrolysis projects using “low-carbon” electricity.

One of the three hydrogen hubs, or industrial clusters, will be in the northwest of the country, focused on exports to the EU, as well as reducing the carbon footprint of the manufacturing of other export products.

An eastern cluster will focus on exports to Asia and the development of hydrogen infrastructure for transport and energy.

A third hub, dubbed the Arctic cluster, will focus on the creation of low-carbon power supply systems for territories in Russia’s Arctic zone.

The second phase of Russia’s hydrogen development plans, from 2025-35, will concentrate on launching Russia’s first commercial-scale clean-hydrogen projects, targeting the export of up to two million tonnes of H2 per year. It will also focus on the widespread adoption of hydrogen technologies in various sectors of the Russian economy, from petrochemistry to housing and utilities.

The third stage, from 2036-50, would see its hydrogen exports grow to as much as 15 million tonnes annually by 2050, with widespread commercial application of hydrogen technologies in the fields of transport, energy and industry.
EU: Hydrogen mandates

On 14 July, the European Commission unveiled its long-awaited Fit for 55 package — policy proposals that would enable the 27 EU states to reduce their greenhouse gas emissions by at least 55% (compared to 1990 levels) by 2030.


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This included a mandate for all industrial users of hydrogen to source 50% of their H2 from renewables by 2030 — but without establishing how the extra costs would be paid for — and the introduction of carbon pricing for heating fuels, road transport and maritime and aviation sectors.

As Recharge has previously reported, studies show that a carbon price would have to be higher than €200 ($235) per tonne of CO2 — up from recent record highs of €58 — to make green H2 cost-competitive with grey.

The package also called for one hydrogen refuelling station every 150km along the Trans-European Transport Network of major trunk roads, as well as in every “urban node” within it, as part of plans for all new cars and vans to be zero-emission by 2035.

New targets were also announced for the aviation and shipping sectors. By 2030, 5% of aviation fuel would be have to be “sustainable” — ie, produced from carbon-neutral biofuel or synthetic fuel derived from clean hydrogen — by 2030, up from less than 0.1% today.

The package also calls for a 13% reduction in greenhouse-gas intensity in shipping fuels by 2035. Clean hydrogen and its derivatives, ammonia and methanol, are widely thought to be the most likely fuels to reduce the huge amount of emissions from the maritime sector.

A world-first carbon border adjustment mechanism — a kind of import tariff — would be brought in to ensure that imports have the same embedded price on carbon as within the EU.

Under the original EU H2 strategy, unveiled in July 2020, the commission called for 40GW of green hydrogen by 2030, with blue hydrogen to be used only in the short to medium term.

Both the H2 strategy and Fit for 55 package still need to be signed off by the bloc’s 27 member states.
‘Dreams’ and reality

Disappointingly for green campaigners everywhere, most of the national strategies see a significant role for blue hydrogen, even though it is not a net-zero solution, could be even worse for the climate than burning natural gas and will require a continued reliance on often-imported fossil fuel.


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Governments also seem to be more interested in pushing for the use of clean hydrogen in cars and heating — despite the inefficiencies and added expense compared to pure electric solutions — when their focus should be on removing the existing emissions from grey H2.

Europe’s current annual consumption of grey hydrogen is about 10 million tonnes per year, resulting in 100 million tonnes of CO2, the equivalent of about 22 million fossil-fuel cars.

As Enel chief executive Francesco Starace recently told Recharge, each kilogram of green hydrogen requires about 50kWh of electricity. “That’s about 500TWh of energy just to displace the existing grey hydrogen,” he said. “So can we then afford to lose money and time to dream about hydrogen being used to cook meals or drive cars? No, that’s stupid. It will not happen.”

He added that one kilogram of hydrogen — produced from 50kWh — would enable a fuel-cell car to travel 80-90km. “Now I take the 50kWh and I put them in an electric car, that car would drive 250km. It’s even worse with heating.

“So why should I do this stupid thing and put this stuff into hydrogen just because someone wants to use some [gas] pipes to move it? Forget it.”

It could be argued that ministers are paying more attention to oil & gas lobbyists pushing to swap petrol and natural gas for clean hydrogen than power companies or independent academics and analysts calling for hydrogen to only be used in sectors where no other options seem possible — such as fertilisers, chemical production, shipping and aviation.

And despite all the announcements, it is worth noting that the global production of green and blue hydrogen is currently minimal, and not one single country has yet put policies in place that would help to make clean H2 cost-competitive with grey.

In fact, no nation has definitively decided what that policy should be, with every published hydrogen strategy pushing that key decision back to an undetermined future date.

In other words, while these national policies offer a direction of travel to potential investors that can encourage investment in hydrogen, they are — so far, at least — merely ambitions, or wishful thinking. A lot of talk, but little action.

And it is plain to see that the planet cannot wait many more years for us to start slashing our greenhouse gas emissions. 

Additional reporting by Rob Watts, Josh Lewis and Andrew Lee.

Alaska’s Oil Industry May Be On Its Last Legs

By Felicity Bradstock - Aug 26, 2021

Last week a judge halted the latest Alaskan oil project following a year of disappointment due to the Covid related drop in oil demand and the cancellation of project after project as the green transition takes hold. It’s hard not to be concerned over the future of Alaskan oil. As locals say they need Alaskan oil for jobs and income, Biden and other forces seem insistent on curbing production in the oil-rich region. 

Just last week, a U.S. judge rejected approvals for a large oil project on Alaska’s North Slope, already approved by ex-President Trump’s administration in 2020, largely due to environmental concerns. ConocoPhillips’ Willow Project in the National Petroleum Reserve-Alaska previously approved development included three drill sites, associated processing facilities, gravel roads, and pipelines on the North Slope, with the potential for further development in the future. 

The project was expected to produce as much as 160,000 bpd of oil, meaning a total of around 590 million barrels over three decades. In addition, the project would have created around 1,000 construction jobs and 400 long-term operations jobs. 

Is it for this reason that many locals are battling it out against environmentalists and international agencies to keep the state’s oil and gas industry running for as long as possible. With an economy largely built on energy, many believe that halting oil and gas developments will leave Alaska with high levels of unemployment and significantly reduced revenue levels.

Alaskan oil and gas has already been hit hard by the Covid-19 pandemic, which left thousands unemployed and saw the lowest levels of Alaskan oil production in over 40 years. In 2020, Alaska lost around 3,000 oil and gas jobs, a reduction from 10,000 employed in the industry to fewer than 6,900, representing the lowest employment rate in the industry in 30 years. 

This is a trend that looks set to continue following the inauguration of President Biden in January this year, who made his stance on climate change and his intended shift away from oil and gas clear; as well as recent landmark reports on the need to replace fossil fuels with renewables over the next decade by both the IEA and the IPCC. 

This August, Biden has once again been bashed for his movement away from national oil, as several complain that it’s costing both jobs and the national economy, while the U.S. continues to rely on foreign oil to meet its needs. 

Biden was criticized by U.S. and Canadian oil supporters earlier this month when he plead with Saudi Arabia and OPEC+ to increase output in order to stabilize international oil prices. Oil majors and politicians suggested that North America would not be in this situation if new projects had been carried out, and output had returned to pre-pandemic levels. After Biden’s request was denied earlier this month, much of the public reiterated this sentiment, as millions of Americans are currently facing ever-rising gasoline prices in the wake of a global pandemic. 

The Governor of Alaska, Mike Dunleavy, sent out a strong message to Biden and the federal judge on their decisions to move away from fossil fuel production in the oil-rich Alaskan region. Dunleavy stated, “Make no mistake, today’s ruling from a federal judge trying to shelve a major oil project on American soil does one thing: outsources production to dictatorships & terrorist organizations”. “This is a horrible decision. We are giving America over to our enemies piece by piece. The Willow project would power America with 160,000 barrels a day, provide 1000s of family-supporting jobs, and greatly benefit the people of Alaska.” 

Related: House Democrats Seek More Oil Drilling Bans

However, the mismanagement of oil revenue in Alaska cannot be overlooked. Despite establishing the Alaska Permanent Fund in 1976 as a means of investing a percentage of the state’s oil revenue in investments in bonds, stocks, real estate, infrastructure, and private entities for the future of the economy, the Alaskan government and big oil operators have been repeatedly criticized for spending on shareholder interests rather than giving oil revenue back to Alaskans themselves. 

In addition, Alaskan oil revenue had been declining long before the pandemic hit, with the government facing a deficit of $1.5 billion at the beginning of 2020. With the largest oil field discovered in North America, Alaskan oil boomed in the late 1960s and following decades. However, it has been in a state of decline since its peak in 1988, falling from a production level of 2 million bpd to under 1 million bpd in 2002. By 2020, Alaska was producing around 460,000 bpd of oil.  

So, while we can blame Biden and environmentalism for the recent loss in Alaska’s oil economy and its rising unemployment levels, Alaska must respond to the decades of decline that came before. It may still have a few years left in it, with existing production remaining relatively steady, but one thing is sure, Alaska must invest more heavily in its non-oil sector if it hopes to thrive once again.  

By Felicity Bradstock for Oilprice.com