SEPT 27, 2023

Good morning! It was an awesome, whirlwind trip on the East Coast, but I’m grateful to be back in the coziness of Seattle’s grey.

Anca and Amena have top takeaways with key newsmakers from our time at Climate Week, and Bill has an important Data Dive on hydrogen challenges.

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Send your energy photos, story tips and more to news@ciphernews.com.

Photo credit: Thierry Monasse via Getty Images

Top takeaways from chatting with the EU Green Deal chief

BY: ANCA GURZU

NEW YORK CITY — Dozens of world leaders descended on the Big Apple last week to talk climate ambition, fossil fuels and geopolitics. Meanwhile, thousands of activists marched through the streets to put pressure on those politicians to act faster.

Amid the flurry of activities dotted by tight security, Cipher caught up with the European Union’s new Green Deal chief at the Plaza Hotel to discuss these big-ticket items.

Maroš Šefčovič, an executive vice president of the European Commission and a Slovak career diplomat, picked up the role at the end of August after his predecessor, Frans Timmermans, decided to return to national politics in the Netherlands.

Šefčovič called on the world to not discard the goal of limiting warming to 1.5 degrees Celsius. Below are other key takeaways from that conversation.

1. Search for the common denominator

The world’s future relationship with fossil fuels will be under the spotlight at this year’s United Nations climate summit in the United Arab Emirates, known as COP28.

Climate ambitious blocs like the EU are building coalitions ahead of the December meetings to support language that would commit the world to ending its dependence on coal, oil and gas.

Šefčovič described the negotiations between now and December as “difficult.”

The EU is looking to support language that will call for the phase out of unabated fossil fuels, a slightly different focus than at last years’ COP27 in Egypt, where the initial push was to phase down all fossil fuels. The 27-member bloc is set to adopt its final negotiating position in October ahead of the December climate summit.

“Unabated” refers to burning fossil fuels without canceling out their emissions via technologies like carbon capture and storage.

Check out our recent primer on the semantics of climate negotiations and how a word can make a big difference.

“We are looking for the language which can build this global consensus,” Šefčovič said. “We believe that the commitment to gradually phase out unabated fossil fuels should be there, and we should use all the technologies which would allow us to get to climate neutrality in Europe by mid-century.”

Reaching that common denominator in climate negotiations is a tough job, especially since the world doesn’t see eye to eye on how big a role fossil fuels should play going forward or how much we should rely on carbon capture technologies to reduce emissions.

This gap was in the spotlight in New York last week, a reflection of the upcoming tensions at COP28.

2. Navigate tough geopolitical times

Russia’s invasion of Ukraine not only forced the EU to confront its dependence on Russian fossil fuels, but also — as the bloc began speeding up its clean energy transition — its reliance on China for everything from critical raw materials to solar panels.

“In this world, geoeconomics and geopolitics will be just more difficult,” Šefčovič said. “This strategic autonomy of being able to stand on our own legs and to be much more assertive — when it comes to all the assistance we can provide to our supply chains in Europe — will be so crucial.”

The Commission is planning a series of regular meetings with various industrial sectors, such as hydrogen or wind, to help build their decarbonization models.

“It’s our common duty to make sure that European industry will stand and prosper in Europe,” Šefčovič said.

But there’s also strength in numbers if allies choose to work together, he added.

“As Western liberal democracies, we have to stick together as partners, as allies,” Šefčovič said.

The idea of creating a green transatlantic marketplace, meant to boost investments and cooperation between the EU and the United States, has picked up steam in recent months, including at the recent EU-US Trade and Technology Council in Sweden.

Šefčovič described the concept as "very appealing.”

But it’s also “not an easy task” in practice, he added. The EU and U.S. are working behind closed doors to iron out differences on various aspects of the U.S. 2022 Inflation Reduction Act and to hammer out a pact aimed at securing critical mineral resources.

3. Make the search for money easier

While the bloc wants to be a cleantech leader, applying for funding for clean energy projects in the EU is complicated and messy.

The issue, described as a symptom of the EU’s bureaucratic and layered system, came to the forefront when companies started tapping into subsidies offered by the Inflation Reduction Act through a U.S. process that European businesses described as comparatively much more straightforward.

The European Commission is mulling a one-stop shop digital portal that would streamline various funding procedures and quickly point business leaders in the right direction when they are looking to tap into EU funding for the energy transition, Šefčovič said.

“Financial incentives have to be channeled much, much faster and more to the point,” he said. “What we hear from business representatives is that very often it’s quite complicated to get funding, that [the process] is not clear.”

Read this article on Cipher’s website.

Lunchtime Reads and Hot Takes

IEA says route to net zero requires more cash and less politics — Reuters
Amy’s take: It’s exciting to see at least any tech (in this case, solar and EV’s) on track for 2050 goals, though the challenges in other sectors are increasingly daunting.

Emmanuel Macron walks tightrope with green policy ‘a la française’ — Financial Times (paywall)

Anca’s take: Banning gas boilers or putting strict rules on house renovations is becoming politically tricky in several EU countries. Politicians are afraid of public backlash.

Ford halts work on E.V. battery plant in Michigan — The New York Times
Amena’s take: Whether the reason is the ongoing autoworkers union strike or geopolitics, the decision, even if temporary, doesn't send a positive signal to boost clean manufacturing at home.

Can the U.S. Make Solar Panels? This Company Thinks So. — The New York Times

Bill’s take: Manufacturing solar panels is a tough business that many countries want in on, including the U.S., India and EU nations. One U.S. company’s story shows why.

Boat gets too close to Vineyard Wind as it snoops for violations — E&E News (paywall)

Amy’s take: This is a wild story about a struggle emblematic of our time: America and its workforce are struggling to grapple with their placement in our increasingly global world.

China, India lead Asia’s biggest hydropower crunch in decades — Reuters
Bill’s take: The persistent loss of clean hydropower supplies in Asia — sometimes amid chaotic weather influenced by climate change — is all too often forcing a vicious cycle by pushing coal and gas use higher.

The Era of Climate Migration Is Here, Leaders of Vulnerable Nations Say — Inside Climate News
Amena’s take: Such news underscores why wealthier nations need to step up on loss and damage funding as climate migration will only get worse.

Renewable energy has hidden costs — The Economist
Anca’s take: This useful explainer seeks to shed light on a seemingly contradictory fact: if renewable energy production is getting cheaper, why are sectors like offshore wind suffering?

How Climate Week in New York Turned Into ‘Burning Man for Climate Geeks’ — The New York Times
Amy’s take: It’s noteworthy that money of all kinds, including public relations, is flowing into climate change after decades of deep-pocketed opposition.

More of what we're reading:

• Exclusive: Shell CEO comes under pressure from within on renewables shift — Reuters

• China opposes ‘not realistic’ global fossil fuel phase-out — Climate Home News

Norway leader on deep-sea mining, carbon capture and wind woes

Photo credit: Norwegian Consulate General/Pontus Höök

BY: AMENA H. SAIYID & AMY HARDER

NEW YORK CITY — Faced with mounting criticism on both fossil fuels and cleaner energy, Norwegian Prime Minister Jonas Gahr Støre expressed adamance his nation — and the world — will make progress tackling climate change, in an exclusive, live interview with Cipher last week.

This Nordic country’s influence in the world’s energy and climate debate is growing. Norway rapidly and significantly increased its natural-gas exports to Europe following Russia’s invasion of Ukraine in early 2021, which broke the bloc’s longtime dependence on Russian fuel. At the same time, Norway is increasingly investing its oil and gas wealth into climate technologies, ranging from carbon capture to hydrogen, prompting controversies.

Støre spoke candidly about his perspectives on climate and energy during an interview with Cipher’s Executive Editor Amy Harder at the Dynamo Energy Transition Summit, held on September 19 as part of New York Climate Week.

In their conversation, Støre:

• Expressed adamant support for deep-sea mining for critical minerals despite opposition from within his own government;
• Defended the role of oil-producing nations in climate discussions;
• Argued fossil fuels will decline in the future but not be fully eliminated;
• Defended carbon capture in the face of growing criticism;
• Underscored the importance of engaging with indigenous people.

To read more about each takeaway, check out the full article on our website.

Clean hydrogen struggles to take off

Source: International Energy Agency, Global Hydrogen Review 2023 • 2023 figures are estimates.

BY: BILL SPINDLE

Despite tremendous fanfare and a flood of promised subsidies, the clean hydrogen industry is struggling to get off the launchpad, according to the International Energy Agency.

In a new report, the agency touted the potential for a major new clean fuel source. But it also underscored that most project developers are hesitating to make the final decision to move ahead because projects are expensive and few committed buyers have stepped up so far.

The agency looked at two types of the fuel that it calls ‘low-emission’: hydrogen made from natural gas with carbon capture technology and hydrogen produced via a machine called an electrolyzer that uses renewable electricity to separate the gas from water.

The agency said new types of low-emission hydrogen could account for 38 million metric tons of production by 2030 — a little less than half the size of the existing market, in which hydrogen is produced through an emissions-intensive process. But just 4% of that projected production is from projects that companies have actually approved to go ahead, the agency said.

Governments are set to pour massive subsidies into both types in the coming years, in the hope that clean hydrogen can replace carbon-intensive fuels, such as those used in long-haul trucking and maritime shipping, and help overhaul carbon-intensive processes, such as steel and cement making.

As with so many clean technologies, China is pushing ahead most aggressively, accounting for 40% of the renewable hydrogen projects that have received final approval. By the end of this year, the country is expected to account for half of the global capacity to produce hydrogen with renewable energy.

Outside of China, a lack of buyers willing to commit to long-term deals has made producers hesitant even with the lure of government subsidies like those in the 2022 Inflation Reduction Act in the United States and Europe’s clean hydrogen industry support. Globally, companies have so far signed agreements for only 2 million metric tons of low-emission hydrogen annually, and half of those contracts are not binding, the IEA said.

AND FINALLY...
Cipher IRL

Last week, the full Cipher team met up IRL (in real life) for the first time at Climate Week in New York! Here we are after a full day of meeting, bonding and dreaming about Cipher’s future.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.