Construction alone accounts for 40% of global energy-related carbon dioxide (CO2) emissions. As the global push to reach Net Zero gains momentum, bio-based buildings are seeing a renaissance with mass timber being touted as a key solution to accelerate the transformation of construction toward carbon neutrality.

Simon Gupta

Fatima Farooq Murawat

is a key part of the global drive to race to net zero emissions. 

We collaborate with energy experts, investment advisors and academia to understand the potential and challenges of engineered solutions. In the third part of the TBS Trilogy, 

we explore the potential and challenges of wooden buildings as a key carbon dioxide removal technology (CDR). You can find the 

Mass timber, also known as engineered wood, is a collective term for large engineered timber elements such as Cross Laminated Timber (CLT) panels. CLT is a prefabricated, solid-engineered wood panel that can be used to build medium to high-rise buildings in a short time, reducing construction time by up to 

 compared to traditional buildings. Currently, the tallest timber building in the world, 

, is about 85 meters tall and has 18 floors.

In the last 10 to 15 years, the timber industry has grown significantly and with new innovative technologies, we can now build timber buildings up to 100 m and higher. Moreover, mass timber has the potential to play a key role in meeting the Net Zero goal by removing carbon from the atmosphere and storing it long-term.”

Wooden buildings are a sustainable alternative to concrete buildings as they

offer proactive climate protection by storing and sequestering carbon for an extensive period of time. By 2100, more than half of the world’s population will be living in cities, meaning that more homes will be built using high-carbon emitting materials like steel and concrete which together contribute to 15% of the world’s CO2 footprint.

Buildings using mass timber can help offset the negative impacts of urbanization by replacing concrete and steel urban houses. According to 

Potsdam Institute for Climate Impact Research

Urban homes made out of wood could play a vital role in climate change mitigation due to their long-term carbon storage potential.”

Wooden buildings hold great potential for becoming long-lasting carbon sinks. The findings of a 

 conducted by PIK suggest that building future cities from engineered wood could prevent 106 billion tons of CO2 from entering the Earth’s atmosphere by 2100. Similarly, in Europe, wooden buildings have the potential to store 

 over the next 20 years. This is equivalent to emissions from 108 coal plants in a year. Another 

 found that substituting wood for conventional building materials reduces emissions by 69% and using wood in half of the new urban construction may achieve 9% of 2030 emissions goals.

In addition to the carbon mitigation factor, there are other benefits such as circularity and well-being that can be achieved using mass-timber buildings. In terms of circularity, 

 sourced from sustainably-managed forests is double circular. During the lifetime of several wood lives (more than 100 years), the softwood trees grow back at least 

 in sustainably managed forests, providing a surplus of wood for applications besides construction like paper, textiles, and energy. Moreover, timber buildings fit well in biophilic design practices that have 

 to increase productivity and well-being by lowering stress and blood pressure levels.

As the world becomes more ecologically conscious, the revival of wood as a core building material is on the rise. As emissions associated with urbanization continue to rise, governments at all levels are looking for low-carbon alternatives. In the UK, between 

 of new homes are built using wood annually, capturing over one million tons of CO2 a year as a result. Similarly, carbon-sequestering wood accounts for over 

 of all new multi-floor buildings in Sweden. In an exchange with Broadpeak,

“Construction from wood will have a big renaissance, especially in Western Europe, as it could be a substantial way to reduce emissions in the construction sector. Already in some areas in 

While engineered wood is gaining traction, there are certain challenges, misconceptions and critiques that hamper its large-scale adoption. Many studies showing a positive climate benefit of mass timber inaccurately assume that using wood is carbon neutral and ecologically sustainable. The foregone cost of carbon that would have been sequestered by the trees if they had not been harvested is rarely taken into account.

Moreover, the conversion efficiency of wood products is very low. 

, Global Implementation Manager, Cities4Forests at 

When trees are harvested to make wood, sometimes as low as 5-10% of the carbon is stored in building materials while the rest (from roots and slash) is left to decompose, releasing significant amounts of carbon into the air. The conversion efficiency of wooden buildings can therefore oftentimes be very low. For mass timber to be climate beneficial, very high bars must be met.”

there is a high risk associated with illegal logging and deforestation, calling into question the sustainability of wooden buildings. If wood is not sourced from sustainable, responsibly managed forests, any benefit derived from the building itself would be offset by increased deforestation and habitat loss. Climate change expert, 

There is no denying ­that wood is a great solution for carbon mitigation. However, construction is a hungry monster. Take for instance the pristine forests in India and Myanmar which are currently under serious attack. The famed 

 finds its way into the US and Europe via India. Likewise, recent 

 have revealed what a sham green certification is. Unless the widespread greenwashing is brought under control, we will have no ancient forests left.

Along with genuine concerns and challenges, there are also many misconceptions and prejudices about timber building that need to be addressed. Many people still believe that tropical deforestation is linked to timber buildings when it is actually due to agricultural practices. 

“People have no idea that mass timber in Europe comes from sustainably managed production forests, mostly with FSC and PEFC certification,” 

Moreover, detractors argue that wood is not as strong or safe as concrete. In 

, wooden buildings made using CLT are equally, if not more, robust, safe and fire-resistant than concrete buildings. “

Many people are afraid of fire hazards when it comes to wooden buildings. Tests have shown however that wood is a robust construction material with few fire risks,

To scale low-carbon construction, we need efficient policy frameworks and government support to mobilize private capital, achieve standardization, and ensure sustainable forestry. Policy actions such as including mass timber in carbon offset crediting programs, third-party verification for sustainable forest management and standardizing CLT production can incentivize the adoption of mass timber.

“Mass timber from sustainably managed forests is one of the most efficient carbon removal solutions. However, due to little awareness regarding its climate potential and lack of timber know-how, it is often overlooked by investors. New climate strategies and policies need to acknowledge timber construction as a scalable carbon removal solution. This will be crucial in driving new funds and capital into the entire timber industry and closing the existing investment gap,” 

Moreover, building codes and regulations that disadvantage light building methods such as mass timber need to be 

 as well. Additionally, there is a need to put in place effective wood management policies that ensure proper recycling of wood at the end of its life to prevent carbon from being released. 

“Strong governance and careful planning are required to limit negative impacts on biodiversity and to ensure a sustainable transition to timber cities,” 

We also need to invest more in research and development to truly understand and enhance the efficiency and mitigation potential of wooden buildings. Conversion efficiency must be improved while the amount of biomass residue that is left over in forests to decompose must be reduced significantly. In addition,

it’s vital to ensure that the supply of wood is sustainable – wood must be sourced from sustainably managed and certified forests to prevent the risk of illegal logging and deforestation. “

We need to invest more in research and development to come up with innovative solutions to tackle challenges associated with timber buildings for it to become truly effective in mitigating climate change,” 

Van der Lugt provides a succinct outlook: 

We need to show that mass timber buildings are not only a climate solution, they are also healthy and cool. In a similar way, the electric cars image has shifted from being high-end to mainstream. The same needs to happen with mass timber buildings. And it will. But for this, we need to keep informing the audience through smart, targeted communication campaigns — design competitions, demonstrations, documentaries — reaching the right target groups.”

illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

How Can Wooden Buildings Support the Net Zero Transition? Racing Net Zero (III/III)

It becomes increasingly clear that reducing emissions will not be enough to meet the goals of the Paris Agreement. As per IPCC estimates, we also need to remove around 6 billion tons of carbon dioxide (CO2) from the air every year by 2050 if we want to limit global warming to 1.5 °C. This is where Carbon Dioxide Removal (CDR) comes into the picture.

How can Direct Air Capture help meet the Net Zero goal?

It becomes increasingly clear that reducing emissions will not be enough to meet the goals of the Paris Agreement. As per IPCC estimates, we also need to remove around 

 of carbon dioxide (CO2) from the air every year by 2050 if we want to limit global warming to 1.5 °C. This is where Carbon Dioxide Removal (CDR) comes into the picture.

CDR comprises nature as well as Technology-based Solutions (TBS) that capture CO2 from the atmosphere and store it durably in geological formations or in products. Currently, almost all of the CDR comes from nature-based solutions like afforestation and reforestation. However, for longer and more permanent CDR, TBS like Direct Air Capture (DAC) are garnering much attention in business, academic and policy circles.

Ramping up TBS like DAC is a key part of the global drive to race to net zero emissions. We collaborate with energy experts, investment advisors and academia to understand the potential and challenges of engineered solutions. This is the second article in our TBS Trilogy that explores DAC as a CDR solution. In case you have missed our first article of the TBS Trilogy, you can find it 

Removing emissions using Direct Air Capture

DAC is a relatively new carbon sequestration technology that extracts CO2 directly from the atmosphere and permanently stores it in deep geological formations. The captured CO2 can also be used in other processes, for example, to produce synthetic fuels by combining them with hydrogen. 

We need to first reduce emissions - that should be our first priority. However, even if we are able to reduce emissions significantly, we will need to remove residual and historic emissions. For this, we need technologies like DAC that have the potential to act as scalable and long-term carbon removal solutions.

As a negative emission technology, DAC is emerging as a promising complementary solution to sustainable fuel, especially in hard-to-decarbonize sectors. Unlike Carbon Capture and Storage (CCS), which captures emissions at the point source, DAC removes CO2 directly from ambient air. Therefore, in harder-to-abate industries like shipping, aviation, and intensive industrial sectors, which contribute around 50% of total emissions. DAC can help extract residual emissions and draw down historic emissions that are currently warming the planet. 

CDR solutions like DAC– where carbon is removed from the air and stored permanently – are vital for removing emissions that are either highly expensive to avoid or where there are currently no alternatives available. Moreover, these solutions enable countries, especially the developed ones, to take responsibility for historic emissions.

Benefits of DAC as a CDR solution include high storage permanence (when combined with geological storage), durability and a limited land and water footprint. The water requirement for DAC is far lower than pathways that harness bioenergy crops for carbon removal. For instance, bioenergy with CCS requires around 

 for each metric ton of CO2 removed while evaporative losses from DAC are less than 25 m3/tCO2. “

DAC is a true negative emission technology with limited land use and water requirements. Moreover, it has the potential to attain greater permanence and durability of safe storage plus accurate measurability of carbon removed,

Given the urgency to meet emission targets, governments as well as private companies have started supporting DAC research, development, and deployment. Some of the early supporters include the United States, Canada, the European Union and the United Kingdom. The United States, for example, has enacted a number of acts to advance DAC research and development including the Investment and Jobs Act that allocated 

 in funding to establish four large-scale DAC hubs. More private companies are purchasing offsets and supporting the development of new DAC plants. For instance, Microsoft is purchasing DAC removal from 

, the largest operating DAC plant globally.

Although DAC has gained traction in recent years, it has also faced harsh scrutiny given its high-energy intensity and costs, pushing numerous researchers and policymakers to advocate for alternative mitigation strategies. Some experts argue that DAC technologies are inefficient in terms of energy consumption and cost. Others see it as a tool that may be exploited by fossil fuel companies to continue expanding their environment-harming operations.

In terms of cost, DAC is currently one of the most expensive carbon removal technologies. As per the International Energy Agency estimates, the current market price of DAC is between 

 a ton - that needs to be brought down to USD 100/ton to become cost-competitive. “

Capturing CO2 from the air is highly energy intensive and therefore generally more expensive than capturing it from a point source at a power station or a cement plant. More research and targeted government support are needed to refine DAC technology and bring down capture costs.

Removing emissions will always be more expensive than reducing emissions. Therefore, DAC should not be seen as an alternative to emission reductions rather it should be used only for non-avoidable and historic emissions.

In addition, some experts argue that DAC technologies could encourage environmentally hazardous activities like fossil fuel extraction by giving oil producers a free hand in expanding operations. While speaking with Broadpeak, 

DAC is a relatively new technology. Therefore, it is highly speculative and hypothetical. More research is needed to understand the true potential of DAC. Meanwhile, we should not be making climate plans based on it. In addition, we need to be careful about letting fossil fuel companies use DAC as an excuse to continue polluting the environment.

, negated claims about DAC being used as a license to pollute by saying, “

The technology itself is not promoting the extraction of fossil fuels. It is the responsibility of the developer to ensure that the technology is used in the right way. At Climeworks, we strongly believe in the defossilisation of the economy. We will never lend our technology to extend the life of fossil fuels.

Questions are raised on the scalability and cost-effectiveness of tech-based solutions and comparisons are drawn between them and nature-based solutions. 

Technologies like CCS and DAC are not yet at the required scale needed to meet the emission targets. Moreover, they are highly expensive, especially for developing countries. However, given the magnitude of the climate crisis, we need to scale up both solutions.

We need a large and accelerated scale-up of DAC facilities, which will require several more large-scale DAC plants to refine the technology and reduce costs. To help reach Net Zero emissions by 2050, DAC needs to remove around 

 in 2030, and 980 million tons in 2050. However, DAC plants currently remove around 10,000 tons of CO2 per year. According to Ahn, “

DAC will help the world reach the last mile towards Net Zero but to be able to reach that last mile it needs to be scaled drastically starting today, or even starting yesterday!

Large-scale deployment of DAC technologies is only possible through targeted government support and incentives. Government policies go a long way in attracting investors to finance carbon removal projects via tax credits, subsidies and grants. However, so far, only a few countries have made plans to scale up carbon removal. For instance, the Inflation Reduction Act in the US raised the tax credit for permanent carbon removal to 

 a ton to attract investors. Developing a pragmatic policy framework alongside CO2 accounting and monitoring systems that recognise and value negative emissions associated with storing CO2 captured from the atmosphere is highly important.

Furthermore, longer-term deployment opportunities will be closely linked to robust CO2 pricing mechanisms and accounting frameworks that recognize and value the negative emissions associated with storing CO2 captured from the atmosphere. 

As a society, we need to set clear standards for what constitutes carbon removal because the market is fragmented with no single standard setter established or universally agreed upon. There need to be agreed standards, ideally backed by governments, particularly regarding the durability and permanence of carbon removal method.

Höglund puts DAC in another perspective saying: “

Nature-based solutions like forestation undoubtedly have a big role to play in meeting climate goals. You can use them to reduce emissions, but you will need more permanent carbon removal solutions for the residual and historic emissions. Moreover, there is not enough land for forestation to remove as much carbon as needed. This is another reason you need complementary tech-based solutions like DAC in the race to Net Zero.

Racing Net Zero (II/III): How can Direct Air Capture help?

What role can Carbon Capture and Storage play in meeting climate goals?

As global carbon dioxide (CO2) emissions continue to rise, it’s becoming clear that we need an increased focus on tackling the emissions of tomorrow through complementary Technology-based Solutions (TBS).

What role can Carbon Capture and Storage play in meeting climate goals?

As global carbon dioxide (CO2) emissions continue to rise, it’s becoming clear that we need an increased focus on tackling the emissions of tomorrow through complementary Technology-based Solutions (TBS). To meet climate goals set forth by the Paris Agreement, we must first reduce emissions. One contested solution that is gaining traction, specifically for reducing unavoidable emissions, is Carbon Capture and Storage (CCS). However, emissions reduction will not be enough. We will also need carbon dioxide removal solutions such as Direct Air Capture (DAC) to remove historic and residual CO2 emissions. Another solution, which has been in use for centuries but is now seeing a renaissance, is Wooden Buildings.

Ramping up TBS is a key part of the global drive to get to Net Zero emissions. 

We work with energy experts, investment advisors and academia to understand the potential and challenges of these engineered solutions. This is the first article in our Technology-based Solution Trilogy covering Carbon Capture and Storage (article 1), Direct Air Capture (article 2) and Wooden Buildings (article 3).

Is Carbon Capture and Storage a game changer?

CCS refers to a raft of climate mitigation technologies designed to capture CO2 directly from the point source. The captured carbon is either stored permanently underground or is utilised for other purposes such as enhanced oil recovery or producing synthetic fuels. 

“It will take decades before we can completely decarbonise our energy systems. We need to mitigate various technological, financial and social risks attached to the energy transition before we can move away from fossils. Until then, we will continue to emit carbon. Therefore, the only pragmatic way to reach the Net Zero target is through large-scale capture, utilisation and, above all, long-term storage of CO2,”

Although CCS has been around for decades, it has never really taken off. In its recent 

, however, the Intergovernmental Panel on Climate Change (IPCC) said that CCS has a key role to play in limiting global temperature rise to under 2°C, the main goal of the Paris Agreement. Moreover, as per the sustainable development scenario of the International Energy Agency, CCS has the potential to meet around 

 of the cumulative emissions reductions needed to meet the Net Zero target by 2050.

 highlighted the significance of CCS in the following words: 

“The best-captured carbon is the one we have not emitted. However, in many cases, we cannot avoid some emissions for instance in the cement or aviation industry. We will continue to emit carbon in these hard-to-abate sectors. Carbon capture from point sources is part of the solution to reduce these unavoidable emissions. It is not a panacea for all climate solutions but it is and will remain a key component of our climate strategies.”

CCS has the potential to deliver deep decarbonisation in hard-to-abate sectors by capturing more than 

 of CO2 emissions from power plants and industrial facilities. In industries where renewables and alternative fuels fail to meet the energy demand, fossil fuels will remain the dominant source of energy production. Proponents argue that failure to set up ways to remove and store carbon emitted by these sectors would make it challenging to hold net emissions to below zero by 2050. Several 

, including from the Energy Transition Commission conclude that achieving net-zero emissions in hard-to-abate industries like cement, iron, and steel, may be impossible without CCS.

Moreover, without CCS, the cost of meeting global climate goals will increase by almost 

, according to estimates by the IPCC. While the micro-level cost of CCS might appear expensive (more than USD 100 per ton of CO2), at the macro level, achieving the Net Zero target without CCS would be exceedingly difficult and costly. In systems where CO2 removal is an inherent part of the production process, such as in natural gas processing, the cost of CCS can be substantially lowered. Moreover, around 450 million tons of CO2 can be captured and stored with a commercial incentive of as low as 

 of CO2, providing a solid foundation for scaling up CCS deployment.

Globally, there is growing traction for CCS. Plans for more than 

 new integrated carbon capture facilities have been announced since 2017, mostly in oil and gas-producing countries such as the United States, Australia, China, and the Middle East. Stronger climate targets and investment incentives are injecting new life into CCS. In the US, for instance, 

 of the US Internal Revenue Code provides a tax credit for carbon storage. The 

 to 45Q tax credits provide up to USD 85 per tonne of CO2 permanently stored and USD 60 per tonne of CO2 used for enhanced oil recovery or other industrial uses of CO2.

Critics uphold that the carbon capture is a mirage

While governments around the world are pouring huge sums of public money into CCS, many experts believe that it is highly dangerous to rely on CCS for carbon reduction. One major opposition is based on the inability of CCS to deliver on its promises. According to a 

 by Tyndall Centre, CCS technology has not lived up to its promises. Instead of capturing up to 90% of the carbon from any industrial process, rates have been as low as 65%. For example, one of Canada’s flagship projects, 

, initially promised a capture rate of 90% but it has never met this goal. By end of 2021, the facility captured roughly 

 of Boundary Dam’s emissions, raising red flags regarding the viability of the technology and federal investment in it.

Moreover, CCS is still highly expensive and not commercially viable without government subsidies. It 

 hundreds of dollars and a massive amount of energy to remove a single ton of carbon using CCS. However, governments across the globe are 

A major chunk of the public money is being diverted into CCS projects that are used for oil and gas operations. This is a terrible use of public resources and distracts from investing in proven climate solutions, like renewables. Canada, for instance, has a 50% tax credit for CCS and only a 30% tax credit for renewables. Why CCS is getting more money than renewables? This is what needs to be assessed and talked about more openly in our public policy debates,”

, Associate Director of National Climate at 

Some experts also argue that CCS technologies allow carbon emitters to continue polluting the environment. A 

published by CIEL concluded that CCS technologies prolong reliance on the fossil fuel industry. Moreover, about 

 of global captured carbon to date has been used for enhanced oil recovery. Some 500 climate activist organizations in Canada and the USA, in an 

, opposed government support for CCS, arguing that it is a “false solution” that allows companies to greenwash their image by permitting a business-as-usual approach. 

“CCS is life support for the fossil fuel industry – a fairy tale solution that distracts from real climate solutions needed for a rapid transformation away from fossil fuels to prevent major climate catastrophes

Critics also point out that TBS are not yet at the scale needed to meet climate goals, emphasising the importance of proven Nature-based Solutions (NBS). They acknowledge the importance of TBS but also highlight that these solutions have a long way to go before they can start delivering on their promises. “

NBS have demonstrated to be effective in not only sequestering carbon, but also in promoting sustainable communities and livelihoods. CCS technologies, on the other hand, are not yet fully developed. They lack scalability and are highly costly. Nonetheless, given the pressing nature of the climate crisis, an increased implementation of both solutions is necessary,”

What is the way forward from a policy perspective?

The commercial deployment of CCS will highly depend on robust cost-reduction strategies and regulatory policies. To offset the risk of extending the life of fossil fuel industries, stringent monitoring and regulatory mechanisms will need to be developed to ensure that the stored carbon is not used to extract more fossil fuel.

In the short to medium term, fossil fuel CCS may be used for enhanced oil recovery but that should not replace CO2 reduction actions to transition to renewables as that defeats the purpose of the technology. 

Even if carbon removal or capture is attached to fossil fuel that’s not necessarily a bad thing given that it is accompanied by a commitment to transition to green fuel. However, if it is done with the sole purpose of distracting and extending the life of fossil fuel companies then that will not be sustainable in long term.”

Whether CCS is a distraction or a true climate solution might be debatable, but what is clear is that we need all solutions on the table to meet our climate goals. It is important to assess the potential and implications of TBS and divert adequate levels public funding to them. We also need to do more research and work towards improving the efficiency and cost of these technologies. Well-designed policy, cost-reduction measures, and technological innovation are key to improving carbon capture deployment rates. As Dubois put it: “

We can learn only if we do. If we wait and do nothing, we will not be able to solve the climate crisis. We need to do more tests and experiments to develop economically viable and effective technologies.”

Racing Net Zero (I/III)

As the global push to fight climate change gains momentum, the demand for decarbonizing hard-to-abate industries is also intensifying. With limited options available for sectors where electrification is not feasible, green hydrogen is seen as a potential solution for a lower carbon future.

To better comprehend the potential of green hydrogen in these challenging industries, Broadpeak collaborated with energy experts and investment advisors to answer the following questions: What role can green hydrogen play in decarbonizing energy-intensive industries? Can it help these industries meet their emission goals? What are the major obstacles blocking its growth?

This is the third and final article in our Green Hydrogen Trilogy exploring the potential of green hydrogen as we seek to move towards Net Zero. The first two articles can be found 

One of the biggest challenges facing the global energy transition is decarbonizing fossil energy uses that are either prohibitively costly or impossible to reduce with currently available abatement technology. Hard-to-abate (HTA) sectors comprises energy-intensive industries that are challenging to decarbonise as they rely heavily on fossil fuels for high-temperature energy. Sectors like iron and steel, aviation, chemicals, cement, and shipping contribute 

of total global greenhouse gas (GHG) emissions and hence, pose significant hurdles to meeting the Net Zero goal. Green hydrogen is increasingly being recognised as a sustainable alternative fuel that has the potential to bridge the gap between renewable electricity generation and these energy-intensive sectors.

Green hydrogen will have an important role to play in the energy transition

,” saidThorsten Schneider, Head of Division at 

The synthetically generated energy carriers enable the decarbonisation of applications that are difficult or impossible to supply directly with renewable energy or directly with electricity generated from renewables. These mainly include high-temperature generation in industry and the use of carbon in industrial production processes such as the steel and chemicals industry.

One of the biggest emitters in HTA sectors is the steel industry, responsible for around 

 of the carbon emissions in Europe and around 

 globally. Considering the existing carbon-intensive production methods, the steel industry faces a number of questions: How can the goal of zero emissions be achieved without slowing down the industry’s growth? Which low-carbon technology can help achieve the Net Zero target most effectively? Many are now looking at Green Hydrogen as one way of reducing carbon emissions in the steel sector. 

, the largest steel manufacturer in Europe and America, recently 

d that it has successfully tested the use of green hydrogen in the production of direct reduced iron (“DRI”) at its steel plant in Quebec. However, it also mentioned the use of blue hydrogen until enough green hydrogen is ready. Therefore, to shift current DRI plants to cleaner fuel, we need sufficient quantity of green hydrogen at affordable pricing.

Another major HTA sector that green hydrogen may help decarbonise is heavy-duty transportation such as trucking, aviation and shipping

A Green Hydrogen economy will offer numerous benefits for countries that have huge renewable potential. Some of these additional benefits could be renewable expansion, employment generation and economic growth. 

As we leave the fossil fuel era and given the difficulties and inefficiencies of moving clean energy, either as electrons or clean molecules, industries will be incentivised to move where the fuel is cheapest. This would mean the industrialization of areas with high renewable capacity like the Middle East, Morocco and Australia. These countries would benefit tremendously as now they could produce their own clean fuel, retaining value in their own country and boosting their economic growth.

Given the rising energy crisis and the pressures to meet the Net Zero target, many countries are now moving towards decarbonizing HTA industries by creating a new market for green hydrogen. Many countries like 

 seek to leverage their high renewable energy resource potential to become global exporters of green hydrogen. On one hand, countries want to de-risk their energy portfolio by doing away with ever-soaring carbon prices. On the other hand, a more volatile gas market boosts the potential role of hydrogen. Hence, many countries are now examining pathways towards the decarbonisation of hard-to-abate industries through green hydrogen.

 is aiming to emerge as a significant exporter of green hydrogen, due to its abundant renewable resources and strategic location. Despite the growing interest in the region's hydrogen potential and numerous hydrogen projects underway, a comprehensive strategy is yet to be unveiled. However, many nations in the region like the UAE are actively working on formulating their individual hydrogen strategies. 

Well-informed hydrogen strategies at the national level will enable the Middle East to experience growth and reduce the cost of production. Furthermore, it can establish itself as a pioneer in cutting-edge research and development of hydrogen technologies and become a leading producer and exporter of low-carbon hydrogen

Green hydrogen comes with its own challenges

Despite the growing traction, green hydrogen faces several impediments in its development and implementation. Currently, the availability of green hydrogen at affordable price is limited. Therefore, many projects for grey hydrogen and natural gas use the argument of being ‘hydrogen-ready’, meaning that they are capable of shifting their current production methods to green hydrogen as and when it becomes widely available. The German energy company 

 (Energie Baden-Württemberg AG), for instance, is currently building hydrogen-ready gas-fired plants that will be commissioned in 2025 and switched to run on hydrogen by 

. However, the challenge remains – availability in sufficient quantities at affordable pricing.

 which is considerably higher than the cost of its alternatives like grey hydrogen which is around 

. One way to reduce the cost of green hydrogen would be to focus on the engineering side by looking at how to improve the technology while pulling down the cost. In this regard, renewable energy will need to be scaled up while the cost of electrolyzers will have to be reduced significantly. Another way is to focus on decarbonising the existing use cases for hydrogen. “

Ammonia and oil refinery are two major markets that can be leveraged to scale up green hydrogen and pull it down its cost curve

There are political, economic and ecological costs attached to green hydrogen that must be addressed if it is to play a key role in the sustainable energy transition.

Transitioning from fossil fuels to a green hydrogen economy is associated with significant infrastructure, political and domestic economic consequences. “

Green hydrogen may come at a great cost to the environment and local communities

If not done correctly, it might hamper energy transition in emerging economies, impact the habitat and harm the natural environment. Therefore, we must recognise and internalize the ecological and political cost of producing green hydrogen

Additionally, the absence of effective strategies and institutional design to support the growth of green hydrogen significantly hinders its widespread adoption. There is a lack of incentives and standardization for green hydrogen, making it difficult for industries to integrate it into their operations. “

We need to incentivize the production and use of green hydrogen through subsidies and tax credits, similar to what is being done in the United States. Also, we should focus on human resource development, providing training and education to industry workers and ensuring the necessary skills are in place to support the growth of the green hydrogen sector,

Going forward, we need to reduce the cost of green hydrogen by establishing a supportive market structure that allows for its growth. This design must provide sufficient support to develop financial and technical capacity and de-risk green hydrogen production, distribution and use. “

Renewables did not become cost-competitive all of a sudden. They were ring-fenced and treated as a nascent industry. They were protected using subsidies until they became cost-competitive with existing alternatives. We need a similar market design for green hydrogen with subsidies for technological innovations to develop cheaper electrolyzers and scale it up,

We also need to strengthen international cooperation and partnerships to accelerate green hydrogen uptake. There is a niche for greater collaboration among governments, industry and academia to foster technological innovation. In addition, global partnerships are needed to pioneer green hydrogen solutions for rapid decarbonisation. The climate crisis provides us with an opportunity for international cooperation. No country will be able to succeed by shining its shoes only. Collaboration with other nations, particularly emerging economies, is necessary to realize the potential of hydrogen.

In short, green hydrogen is not a single solution to all energy problems, but it does have a crucial role to play in the decarbonization of hard-to-electrify industries.

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https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors

Springfield, C. (2022). Why Saudi Arabia Is Primed to Become a Global Leader in Hydrogen Supply. International Banker. 

https://internationalbanker.com/finance/why-saudi-arabia-is-primed-to-become-a-global-leader-in-hydrogen-supply/

Fueling the Future (III/III): Can green hydrogen help decarbonise energy-intensive industries?

The transport sector is one of the biggest carbon emitters worldwide. As the world tries to shift away from fossil fuels, green hydrogen is being touted as one key solution. Recently, many countries have adopted legislative proposals to decarbonise the transport sector by facilitating the uptake of green hydrogen.

At Broadpeak, we collaborate with policy experts and investment advisors to understand the world’s most pressing issues. As we examine current trends to watch for, we asked energy experts, does green hydrogen have the potential to become the fuel of the future? What are the major obstacles to its scalability? And how can we develop the best use cases for this innovative alternative energy in the transport sector?

This is the second article of our Green Hydrogen Trilogy. The first article on the role of green hydrogen in the energy transition can be found 

The transportation sector is the second-largest carbon emitter, after electricity and heat generation, accounting for about 

 of global emissions. Produced using renewable energy, green hydrogen and its derivatives — also known as “e-fuels”— such as ammonia, methanol and synthetic kerosene — are increasingly being recognized as essential solutions to help meet climate goals set forth by the Paris Agreement.

In the transport sector, green hydrogen offers promising prospects for decarbonizing sectors that are extremely difficult to decarbonise. Mainly, it will play a vital role in the decarbonisation of the aviation and shipping sectors— according to an 

 modelling the most cost-effective path to net-zero emissions by 2050.

 of worldwide carbon emissions and is one of the most difficult sectors to decarbonise. The current battery technology is too heavy to be used in larger planes, therefore, one possible solution could be e-fuel produced from green hydrogen. Different players in the sector are now trying to unlock the incredible potential of green hydrogen for disruptive emissions reduction. For instance, 

 has committed to launching at least one zero-emission commercial hydrogen plane by 

. The European plane manufacturer also estimates that hydrogen has the potential to reduce carbon emissions in aviation by up to 

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Simon Gupta

Simon Gupta

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