Carbon Commentary newsletter 17th December 2023
CARBON COMMENTARY NEWSLETTER
This is a weekly newsletter about low-carbon energy generation and efficiency. I summarise the blog posts I have published during the previous week and comment on news stories that have interested me in the last few days. Subscribe at www.carboncommentary.com.
Things I noticed and thought were interesting
Week ending December 17th 2023
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1, Synthetic fuels. The manufacture of ethanol from corn releases large quantities of CO2 which is vented to the atmosphere. Scientists have recommended that this CO2 is used ito make other fuels by combining it with green hydrogen. China’s State Power Investment Corporation (SPIC) appears to have decided to build what I think will be the world’s first large-scale plant. Reports suggest a 3.5 GW wind farm will make sufficient hydrogen alongside ethanol manufacture to produce about 400,000 tonnes of ‘Sustainable Aviation Fuel’ and similar amounts of methanol, probably for shipping. These figures represent about 0.1% of global fuel demand for aviation and ships. The cost will be just under $6bn.
2, Battery swapping. We had all thought this approach was a dead end but Stelllantis (Citroen, Peugeot, Fiat, Chrysler etc) just did a deal with a battery swapping business. San Francisco-based Ample will install stations in Madrid in 2024 that will offer a 5 minute swapping service to a fleet of 100 Fiat 500e cars. Ample also makes modular car battery packs that can apparently easily replace the existing Stellantis batteries. This venture follows the entry of Chinese vehicle manufacturer Nio into the European battery swap market. It has about 2,000 swapping stations in China and claims a 3 minute turnaround. Battery swapping has a clear economic rationale for those people, such as taxi drivers, who don’t want to wait an hour in the middle of the day while their vehicle charges. Of course it may also mean that manufacturers can sell cheaper cars with less battery storage because it takes so little time to swap the discharged batteries for full ones.
3, Measuring carbon in soils. The world needs far better measurement techniques for checking on the levels of carbon in agricultural soils. Intensive farming has depleted soil organic carbon (SOC) levels and new agricultural methods such as ‘regenerative farming’ hope to reverse this change. But levels of soil organic carbon (SOC) can vary hugely within a few metres inside a single field, meaning that accurate assessment of the average level usually requires very large numbers of expensive measurements. Scottish soil sampling pioneer Agricarbon raised a new round of funding from Shell and others to complement existing investments from Nestlé. Agricarbon’s robotised sampling and clever data analysis should enable rapid international expansion into a market urgently needing good verification of claims that regenerative agriculture will improve SOC levels.
4, EV sales. The last few weeks have seen reports of a ‘slowdown’ in EV sales. What is actually happening is better described as a decrease in the rate of growth, a very different phenomenon. Consultants Rho Motion reported that November 2023 global sales reached their highest level at around 1.4 million cars, up about 20% year-on-year and the highest ever monthly total. Sales in North America were particularly strong. European volumes were less impressive. Several governments in Europe have also reduced or restricted subsidies in recent weeks, including Germany and France. The changes in French support are likely to particularly affect sales of lower cost Chinese cars. So far this year, plug in cars in the UK have achieved an almost 24% share, up from just over 21% last year.
5, Lithium extraction. Current methods of mining lithium are environmentally problematic. Innovators are now focusing on what is called ‘Direct Lithium Extraction’, a variety of potential processes that chemically extract the metal from liquid sources, such as geothermal brine. There’s little waste and no need for huge evaporation lakes. Although there is scepticism about the commercial viability of some of these routes, at least one DLE process (adsorption) has been used commercially since the mid-1990s. DLE seems likely to offer reasonable costs for lithium production and is being taken up by the new oil industry participants entering the lithium industry, such as Exxon and Koch. Adionics, a French start-up with a new DLE approach, raised €25m, taking Chilean lithium giant SQM onto its shareholder register. DLE makes new sources of lithium much easier to exploit. Despite what you sometimes hear, there will be no long-term shortages of this metal. (I saw the Adionics story in the newsletter of Net Zero Insights, a business that tracks fundraising and other corporate developments in climatetech. Disclosure: I own shares in NZI).
6, Electrolyser manufacturers exit hydrogen refuelling. Nothing signals the poor prospects for hydrogen fuel cell vehicles as clearly as the withdrawal of the key electrolyser manufacturers from the sector. Last week, NEL sold all its shares in Everfuel, which operates a small number of hydrogen filling stations in northern Europe. McPhy said it was negotiating to sell its sites to Atawey, another French operator of hydrogen filling stations. ITM Power sold its similar business two months ago.
7, Direct Air Capture. An important few days for DAC. Climeworks sold 80,000 tonnes of future CO2 extraction to international consultants BCG, its biggest sale ever. (BCG has already bought 40,000 tonnes this year from Climeworks competitor CarbonCapture). At the other end of the spectrum, UK start-up Airhive announced a joint venture to build a 1,000 tonnes/year trial plant in Canada with Deep Sky, a prospective developer of megaton scale DAC projects. The particular interest here is that Airhive technology is significantly different to conventional approaches to DAC. It grinds up CO2 absorbing rocks into microscopic dust and then ‘fluidises’ the particles, creating a semi-liquid that rapidly chemically absorbs the CO2 in the air, resulting in permanent storage. Airhive’s striking claim is that ‘the process removes close to 100% of the CO2 in air passed through its system in less than 0.1 second’. If Airhive’s technology is as good as it says, BCG’s purchase of Climeworks credits will look poor value for money. I have a hunch (and, no, I don’t have the numbers to back this up) that CO2 absorption by mineral dust or through 'enhanced rock weathering will turn out to be far cheaper than the amine-based technologies such as Climeworks uses.
8, Beef emissions. Would moving beef production back into the fields and out of feedlots reduce the huge carbon footprint of beef? An ill-tempered debate rages. New academic analysis concludes that even low intensity outdoor beef farming is much worse for the climate than crowded feedlots. Among other reasons, the animals grow much more slowly outside, meaning that lifetime methane emissions are higher for the same amount of beef. The researchers also point to the importance of ‘carbon opportunity cost’, or the carbon sequestration that could occur on pastureland if, instead of cows grazing, trees were allowed to grow. Not only do outdoor cows produce substantial weights of emissions but they use land that otherwise might be sequestering carbon.
9, Flow batteries. The rapid development of lithium ion has tended to overshadow flow batteries, an alternative technology for static (not transport) energy storage. Flow batteries offer potentially lower costs, don’t generally need expensive raw materials and can typically run for longer periods (perhaps up to 8 hours or more, compared to a maximum of 4 for large lithium batteries). However static lithium ion batteries have been making improvements in the number of hours of discharge they can offer, reducing the importance of this critical benefit of flow batteries. Norwegian utility Statkraft backed the Netherlands start-up Aquabattery for a trial in the city of Delft. The long duration storage that Aquabattery can offer will be tested for up to a year. The hope is that 8 hour flow batteries will be better than lithium ion at coping with the intra-day variation in electricity supply and demand, as well as helping deal with grid congestion in places like the Netherlands. When, for example, solar is producing large amounts of power which cannot not be accepted onto the grid, flow batteries may be able to store electricity and release it at night more effectively than lithium ion. (Thanks to Tony Cooke).
10, Hydrogen project growth. The number of projects identified by the Hydrogen Council rose by 35% over the six months to end-November 2023 up to around 1,400 large projects globally. However only about 7% have passed through the Final Investment Decision process. In Europe, for example, $190 bn of clean hydrogen production schemes have been proposed but only $8 bn have been fully approved. Across the world, the value of projects on which final decisions have been made has risen about 30% in the last six months but part of this rise is probably driven by higher capital costs. Worryingly, the Hydrogen Council report is markedly less optimistic than before about eventual green hydrogen production cost. It projects a figure of $4.5-$6.5 a kilogramme, up 30-65% over the last six months. The cause is the inflation in prices of supplies, higher cost of capital, supply chain problems and elevated renewable energy costs.
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