Carbon Commentary newsletter

1, Magnets without rare earth metals. Analysts predict price instability and severe shortages of the metal neodymium because of the dominance of China in the supply chain. Neodymium is needed for the manufacture of the strongest magnets in items such as wind turbines and the motors of electric cars. Niron Magnetics, a US company, raised another $25m from investors, including Samsung and car component manufacturer Magna, to commercialise its alternative iron nitride magnetic materials, avoiding the need to use any rare earth minerals. This new money adds to the $33m raised in November 2023 from major automobile manufacturers. The Niron technology should enable the production of magnets of comparable strength but at much lower cost and with very limited environmental impact. They will also work better at higher temperatures.

2, Electricity for hydrogen manufacture in the steel industry. German steelmaker Salzgitter and the UK’s Octopus told us that they had agreed a deal to supply power from a German solar farm to make hydrogen. The quantity specified was about 120 GWh. ThyssenKrupp, Germany’s largest steelmaker, said it was buying a similar quantity of electricity from an RWE wind farm. In total, these two deals will be sufficient to make about one fifth of one percent of German blast furnace steel.  Turning all primary steel production over to using hydrogen would require about twice Germany’s total current production of solar energy.  No wonder the search is intensifying for new sources of imported hydrogen. But Arcelor Mittal says it wants to go in a different direction, buying imported iron made using hydrogen to turn into steel. It says European hydrogen will always be too expensive and iron would be better made in very low cost energy locations to be converted to steel in Europe. The countries that gave the company huge subsidies to switch blast furnaces to hydrogen direct reduction plants will not have been pleased to read this.

3, Switching to heat pumps. Thermondo, Germany’s largest home heating installer said it had stopped providing fossil fuel boilers. From February 2024, it will use only heat pumps for domestic heating. ‘Thermondo is now fully concentrating on heat pumps, photovoltaics and other technologies for climate-neutral living and sees itself as making the energy transition in single-family homes possible’ said the company. (I saw this on Jan Rosenow’s social media account).

4, Grid connections. The single biggest obstacle to the expansion of renewable power is the lack of capacity to make connections to the grid. This is true almost everywhere around the world. One important way forward could be the development of contracts that accept new wind and solar but with the explicit understanding that the grid can disconnect the renewables at times of excess electricity production. Many developers will accept this provision, knowing for example that high winds tend to not occur at the same time as high solar output so they won’t be frequently curtailed. Most national grids have been very reluctant to put this option forward but the Estonian network recently made clear that customers could now accept this option if the local links are overcrowded. This is particularly brave in that Estonia is currently engaged in the complicated manoeuvre of disconnecting itself from the Russian grid and synchronising with the rest of Europe. There’s a chapter on how grids might be able to handle the expansion of renewables in my new book. (Thanks to Ursula Brewer).

5, ‘Gold’ hydrogen. Pure hydrogen (now called ‘gold’ hydrogen) is generated by chemical reactions between iron-bearing rocks and water below ground. An active debate has begun on whether large quantities of the gas can be extracted from these natural sources. An increasing number of optimists claim that trillions of tonnes are potentially available, and at costs that will make electrolysis of water uneconomic. Many others point to the likely loss through porous rocks and fissures of very high percentages of the hydrogen naturally created. And underground microbial life may also consume H2. Much of the enthusiasm of recent weeks arises because of the report in a science journal of the volumes of hydrogen being found in an Albanian metal mine. The researchers calculate this source to naturally produce over 200 tonnes a year, said to be one of the largest resources ever found. The magazine New Scientist called this a ‘huge’ amount but, for context, this would be worth just $1m at a price of $5 a kilo of H2. Collecting it and taking it to a hydrogen terminal would be barely economic, particularly if the processes affected the other outputs of the mine. A cautionary story arises from the pioneer Natural Hydrogen Energy. The company has drilled for hydrogen and the associated helium in Nebraska and claimed recently to the FT to be two years from commercial production. However on its web site Natural Hydrogen’s statement of its core activities says ‘we are guest speakers, lecturers and ambassadors for the proliferation of natural hydrogen’.  And there’s no promise of any further drilling.

6, Recycling nylon. Nylon is a difficult plastic to recycle. Only about 2% is currently reused in any way. In common with other plastics, the eventual route to full recycling will be the chemical breakdown of the polymer back into the original monomer. As with the Carbios polyester process - covered in last week’s newsletter - Australian company Samsara Eco uses enzymes to carry out the breakdown of nylon. According to Samsara, this process can be completed at low temperatures and is finished within hours. The business announced the launch of a new range of sports clothing with its Canadian partner Lulemon, claiming that the material contains over 90% recycled nylon.

7, Long-term hydrogen storage. Gasunie is the state-owned gas transmission company in the Netherlands and is leading the development of salt cavern storage for hydrogen in the Europe. It announced it was working on the development of a huge 1 TWh storage site near Wilhelmshaven in northern western Germany. I think this is may be the biggest proposed hydrogen storage site in the world but it probably represents less than 1% of eventual storage needs in north west Europe.  Gasunie will employ an underground salt dome that is already used for holding natural gas. Hystock, Gasunie’s other main hydrogen project, will operate from 2028 in the northern Netherlands, also in salt caverns, and will function as an open access business, storing the gas for private sector participants in the hydrogen market. I think Gasunie is right to say that without the early development of large scale storage the growth of the hydrogen market will be severely curtailed.

8, Tidal power. Tidal turbines have not yet achieved the cost and performance that many expected. A new design from Swedish company Minesto connected to the Faroe Islands grid earlier in the month. This unusual 1.2 MW machine acts like a kite circling in a figure of eight, thus boosting the average speed of turbine rotation. (Explanation here). The company said that after the first two weeks of power production ‘performance is satisfactory and as expected’. The company plans a total of 200 MW of turbines around the Faroes, providing about 40% of the needs of the islands. This would be by far the largest tidal installation in the world.

9, Dual-fuel power stations. Australia opened its first power plant capable of running on a mixture of hydrogen and natural gas. I think this may be the first new gas power station carefully designed to burn some hydrogen. Germany announced subsidies to encourage the construction of similar plants that can be converted to hydrogen, with a complete switch required by 2040.

10, The health effects of cycling compared to the carbon benefits. A nice recent study (available today in pre-print form, and thus not yet peer-reviewed) estimated that each kilometre of cycling in France saved about €1, including both reduced health care costs and the estimated benefits of longer, healthier lives. This number is somewhat higher than similar academic work. I thought it was interesting to compare this outcome with the carbon dioxide benefit of not driving. Perhaps surprisingly, this figure is much lower; not driving a car for one kilometre reduces emissions by about 200 grams, suggesting a climate benefit of around 2 Euro cents, assuming a CO2 cost of $100/tonne. So the health benefits of active travel are vastly greater than the climate gains. Perhaps policy should focus more on this. But the researchers also make the point that encouraging cycling also encourages people to travel less, perhaps shopping at the store a kilometre away rather than driving to the larger shop ten kilometres distant, thus reducing emissions by a larger amount. 15 minute cities are good for carbon, good for health and probably very beneficial for the development of stronger communities.

There was a silly typo in last new week’s newsletter. I said that the recent German solar auction had resulted in a price of about €0.5 per kilowatt hour when I should have written €0.05, or 5 Euro cents a kilowatt hour. Apologies, and thank you to the many people who wrote very politely to point out the error.