If the world wants to seriously take global warming well below two degrees Celsius as the Paris Agreement demands, then two technologies will be vital to this process. According to Wood MacKenzie, they are Carbon Capture, Use and Storage (CCUS) and Green Hydrogen.
CCUS is a technology that can capture up to 90% of the carbon dioxide (CO2) emissions produced from the use of fossil fuels in electricity generation and industrial processes, thereby preventing the carbon dioxide from entering the atmosphere.
As for Green Hydrogen, this sees the employment of technology that allows for the process of electrolysis to take place. This method uses an electrical current to separate the hydrogen from the oxygen in the water. Research indicates that hydrogen is a universal, light, and highly reactive fuel that produces energy without emitting carbon dioxide into the atmosphere.
Wood Mackenzie was keen to note that while both are promising options, neither has yet been successfully deployed commercially at scale. The consultancy group which believes that the world is on course for a 2.8 to three degrees Celsius trajectory, stressed that going in the opposite direction means utilizing these technologies rapidly to build on the promise of cheaper renewables and decarbonize difficult-to-abate segments of the economy.
Furthermore, Wood Mac analysts were keen to note that the versatility of green hydrogen is indeed remarkable, with three times the energy content compared to fossil fuels.
Specifically, Prakash Sharma, Wood Mac’s Head of Markets and Transitions for Asia Pacific, asserted that the declining costs of solar and wind power make green hydrogen an attractive proposition. In some nations, Sharma said that green hydrogen production costs will become competitive with fossil fuel-based hydrogen by 2030.
“Most energy Majors and miners have started to ramp up diversification efforts. Internal carbon price assumptions have increased up to US$70/t or higher for new project FIDs. Capital has followed: not just to renewables, but green hydrogen, fuel cells and CCS/CCUS projects, energy storage and end-user consumer management,” said Sharma.
While the challenges facing the commercial deployment of green hydrogen and CCUS are daunting, Sharma’s colleague David Brown, who serves as Wood Mackenzie Head of Markets and Transitions for Americas, opined that both must be part of the solution if the world is to achieve the Paris goal for global warming. To play that role, he said that the technologies will require sustained policy support.
But if world leaders want to maintain any credibility in pledging commitment to the Paris goals, Brown articulated that they will need to do more to show how they intend to achieve them. “As things stand, we are not going to get there,” added Brown.