Snippets for 29 July 2021

Thanks for reading our Snippets newsletter this week. We have once again included a mixed selection of articles we hope you find interesting.

We start with a look at a carbon tax that could hit NZ exports. The EU and the US have both announced proposals to put levies on foreign goods that aren’t subject to carbon pricing in their home countries. This could affect many NZ exports. Although just a proposal at present, can NZ meet the challenge?

Mark Carney, a UN envoy on climate change, has said “for the world to meet its climate goals, governments would have to force industries to follow clear rules, on everything from energy generation to construction and transport, and set carbon prices that would drive investment towards green ends and close down fossil fuels”. NZ needs to meet the challenge.

We next look at Hydrogen. ‘Is it the new oil?’. This wide ranging article looks at how hydrogen could play a part in reducing global emissions (Green Hydrogen) and how various countries are looking at developing the resource. NZ also has ambitions to become a major player, with Meridian and Contact Energy commissioning a study to look at hydrogen production in Southland in the coming years. NZ has also signed a memorandum with Singapore to collaborate on the production and deployment of hydrogen.

Volvo is also banking on green hydrogen being used to produce the steel for their cars. They have signed a statement of intent with Nordic steelmaker SSAB, to commercialize a process to produce steel using green hydrogen instead of coal.

Heavy vehicles represent less than 4% of the global on-road fleet, but trucks are responsible for about 27% of global on-road fuel and greenhouse gas emissions. It’s an industry that would benefit from other power sources. Zero emissions trucks are hitting the market at an accelerating rate with new models and increasing ranges being developed at pace.

Energy supply grids are changing, from ‘large’ single points of supply to a myriad of supply options. Wind, solar and even electric vehicles will have a big part to play. While more developed in California, as described in this article, symbiotic grids will become more common as supply options expand.

We finish this week with a look to Moscow, which has recently baked in record temperatures. Russian president Vladimir Putin, notorious for his scepticism about global warming, has now said that climate change is a priority and vowed to work along with the United States to battle increasing global temperatures. Wow!

In the future, New Zealand exports are likely to be subjected to border taxes that consider embodied carbon. Currently, two of our largest trading partners are considering implementing taxes aimed at levelling the playing field between local producers, and imports. This will allow for the EU and the US to implement climate policy, yet not disadvantage their local producers. Thus, if a nation with weaker regulation wishes to trade, they must either pay the tax, or improve GHG reductions performance. How will NZ respond? Read more

The former head of the Bank of England, Mark Carney, says that governments must better regulate businesses in order to tackle the climate crisis. Mr. Carney feels that the invisible hand of the free market will not reduce emissions alone, and that governments should force industry to play active roles, while carbon prices help to drive green investments. He also said that the public needs to push political leaders, in order to give political strength and mandate to act. Read more.

We next examine the role of hydrogen in our energy future. This article paints a very comprehensive, but mixed message, with Japan being very bullish and, worryingly, so are fossil fuel companies. There are three different types of hydrogen – ‘grey’, which uses fossil fuels without sequestration, ‘blue’, which uses fossil fuels but with sequestration and ‘green’ which is hydrogen from renewable energy. Grey hydrogen produced on a mass scale can only be climate damaging and overall, incredibly energy inefficient. Read more.

Which is why the news that Meridian Energy and Contact Energy are seeking expressions of interest to build a 600 MW green hydrogen export facility, once the New Zealand Aluminium Smelters supply agreement finishes at the end of 2024, has been welcomed. Green hydrogen is regarded as the most promising energy source to decarbonise sectors such as heavy transportation and industrial processes that currently rely on fossil fuels, with over $200 billion already committed around the world for the development of hydrogen economies. Read full article here.

Furthermore, New Zealand has just entered into a Memorandum of Cooperation on low-carbon hydrogen with Singapore. "This memorandum builds on the Singapore-New Zealand Enhanced Partnership signed in 2019 and marks the start of a journey between our two countries to collaborate on the production, deployment and research into a new hydrogen economy," said Energy and Resources Minister Dr Megan Woods. "Hydrogen is a key future fuel option that will help us meet our climate goals by enabling us to decarbonise transport and industrial applications in particular, that will be hard to electrify. Read more

Steel, one of the most energy intensive industries in the world – contributes 11% of total global emissions. To make this greener, using hydrogen may be the answer. Volvo (Sweden) seem to think so and have a new initiative to make their cars with fossil fuel free steel by 2026. So, Hydrogen is now being seen as not just a futuristic vehicle fuel, but a fuel for high intensity industry processes like steel manufacture. But it needs to be “green Hydrogen” to make “green steel” as steel accounts for 20-35 % of the vehicle production process emissions. Read more.

Heavy trucks have been seen to be a difficult challenge in the area of eliminating emissions. But now, the reality is that low emissions and better range trucks are hitting the market at an accelerating rate - zero-emission heavy-duty trucks (ZE-HDT’s). An 80% increase in models from 40 to 71 from 2020 to 2023, and range also accelerating quickly with 560 km expected by the end of this year, and 965 km from 2023. These vehicles are further along in the commercialization process than most realise. Read more.

The days of large power plants supplying a wide area with electricity are changing – the advent of wind and solar power has created a situation where more of a balancing act is needed to supply the grid. Unlike fossil fuels that produce a consistent supply of baseload electricity, renewables only generate power one-third to one-fifth of the time. So, a new type of grid is needed to handle this balance - a symbiotic energy system that exchanges electricity, composed of millions of interdependent sources of generation, storage, and adaptive response. Read full article here.

As Moscow bakes in record temperatures, Vladimir Putin has declared climate change as a priority! In an unexpected move, he has agreed to work with the USA to combat climate change together. The sustained record heat wave Russia is currently experiencing may have something to do with this u-turn. Read more