Grasslands are increasingly being recognized as a key solution to help achieve our environmental goals

Simon

Fatima Farooq

This is Part 3 of a three-part series on Nature-based Solutions. You can find Part 1 <a href="https://illuminem.com/illuminemvoices/what-role-can-forests-play-in-tackling-the-climate-crisis" target="_blank" rel="noopener">here </a>and Part 2 <a href="https://illuminem.com/illuminemvoices/how-crucial-is-the-role-of-wetlands-as-a-naturebased-solution" target="_blank" rel="noopener">here</a>.
Grasslands offer a dual benefit as nature-based solutions (NBS), functioning not only as carbon removal solutions but also as a means to conserve biodiversity. Given their significant potential, grasslands are increasingly being recognized as a key solution to help achieve our environmental goals.&nbsp;
With our articles and trilogies, we want to share some of the knowledge we gain in the process with our network.&nbsp;In&nbsp;<a href="https://illuminem.com/illuminemvoices/what-role-can-forests-play-in-tackling-the-climate-crisis" target="_blank" rel="noopener">Article 1</a> of our NBS Trilogy, we examined Forests and in Article 2, we explore Wetlands. In our third and final article of our NBS-Trilogy, we examine the importance and challenges of grasslands as key NBS.&nbsp;
<h2>Nature's solution to interlinked planetary crises&nbsp;</h2>
Covering close to one-third of the Earth's terrestrial surface, grasslands are among the most diverse and valuable ecosystems globally. Grasslands are large open areas of grass, usually found between forests and deserts. There are two main types of grasslands, tropical (hot savannahs) and temperate (prairies and steppes). Both types of grasslands are critical for regulating climate and preserving biodiversity while supporting various sustainable development goals. Mikhail Accom of Eduponics told us, 
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&ldquo;Grasslands act as a carbon sink and provide habitats for a wide range of flora and fauna. They also play a crucial role in maintaining soil health and fertility, preventing erosion, and improving water infiltration and retention.&rdquo;&nbsp;&nbsp;
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Grasslands are one of the most important NBS to tackle climate change but they are often overlooked for the headline-grabbing forests. In reality, the global carbon stock in grasslands is about 50% more than the amount stored in world forests. By retaining the majority of their carbon in their roots underground, grasslands tend to be more efficient at carbon storage than forests, especially in areas susceptible to drought and wildfires. Around 34% of the carbon stored in land-based ecosystems is found in grasslands, which is only slightly lower than the 39% stored in forests. Moreover, grasslands capture approximately 343 gigatons of carbon dioxide, making them as critical as any other natural ecosystem for mitigating climate change.&nbsp;&nbsp;
Grasslands can also aid in climate adaptation efforts by strengthening the resilience of ecosystems and, in turn, supporting communities in coping with climate-related disasters. Due to their extensive roots, grassland plants can absorb more rainwater than other plants and prevent flooding. Additionally, deep root systems dry out slower than those with shallow roots, making grassland plants better equipped to endure droughts. Accom highlighted,
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"Preserving grasslands in cities can increase the ground's capacity to retain water and improve infiltration rates. By having more grasslands in urban areas, it is possible to enhance the climate resilience of cities.&rdquo;&nbsp;&nbsp;
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Moreover, grasslands can play a fundamental role in addressing the current biodiversity crisis by offering ideal conditions for a vast diversity of habitats and species. In terms of species diversity, grasslands may surpass even tropical rainforests and are considered one of the most abundant habitats on the planet. Furthermore, many animal species rely on the fruits produced by plants that are pollinated by grassland insects, making them indispensable for various coexisting species. Florian M&auml;nner from Fraunhofer Institute said, 
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"Grasslands can play a crucial role in overcoming the biodiversity crisis as they provide vital habitat and food sources for a wide range of species. Therefore, it's essential to prioritize the preservation of these vital ecosystems, including the extensive and species-rich grasslands.&ldquo;&nbsp;
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Grasslands not only provide important ecological services, but they also offer significant social and economic benefits. Representing around 80% of the world's agricultural and livestock area, these ecosystems are essential for global food production, contributing to ruminant milk and meat production.&nbsp; Grasslands are also suitable for livestock farming due to the flat terrain and abundant vegetation, providing livelihoods for millions of rural and indigenous people. Additionally, grasslands offer opportunities for ecotourism, providing jobs and economic benefits to local communities.&nbsp;&nbsp;
Given their potential to address multiple planetary crises, grasslands have gained traction worldwide. Almost two-thirds of the governments supporting the Paris Agreement have included NBS actions in their national climate plans, with special emphasis on grassland restoration and protection. During the COP27 conference, the importance of NBS was acknowledged for the first time, with particular stress on forests and grasslands to address climate change and ensure food security. Similarly, at COP15, restoration, conservation and management of grasslands were lauded as key strategies to restore and conserve biodiversity. 
<h2>Challenges confronting grasslands&nbsp;</h2>
Despite their central role in food production, biodiversity, climate mitigation, and livelihoods, grasslands are facing the fastest and highest rates of conversion and degradation. Unsustainable agriculture is the primary driver of the unrestricted conversion of grasslands to farmlands for the cultivation of monoculture crops like wheat and for grazing livestock. These intensive agricultural practices adversely affect grasslands by causing overgrazing, pollution and erosion of local and traditional cultures. For instance, due to land conversions, North America&rsquo;s Great Plains and Brazil&rsquo;s Cerrado have already lost around half of their native grasslands.&nbsp;&nbsp;
Grasslands are also facing threats from land transformation for urban development. The loss of grasslands severely impacts the ecosystem and the species that depend on them, leading to biodiversity loss, carbon emissions and negative impacts on freshwater systems. Additionally, the conversion of grasslands into urban areas exacerbates the heat island effect and contributes to climate change. For example, the Cape Flats Sand Fynbos, which is a critically endangered vegetation type found in the Cape Town area, has suffered greatly due to urbanization and agriculture. It was once a thriving grassland, but today only 1% of its original extent remains.&nbsp;
Degradation of grasslands is linked with biodiversity loss as various animal and plant species rely on these critical ecosystems for survival. A recent study found that the biggest driver of biodiversity loss globally is deforestation and the conversion of natural grasslands to intensive agriculture and livestock. As grasslands are converted to agricultural or urban land, the habitat for diverse wildlife and critical pollinators is destroyed, resulting in a massive decline in the population of these species. This loss of biodiversity not only has far-reaching consequences for global food security but also threatens to destabilize the delicate balance of the environment.&nbsp;&nbsp;
Climate change is another major threat that deteriorates the health of grassland ecosystems and diminishes their ability to sequester carbon, maintain soil fertility, and provide habitat for wildlife and humans. Extreme weather events like wildfires can destroy grasslands and turn them into carbon emitters, further exacerbating the climate crisis. Abraham Nqabutho Dabengwa from the University of the Witwatersrand told us, 
<blockquote>
&ldquo;The rapid pace of climate change, desertification and unsustainable agriculture practices are threatening to irreversibly alter grassland ecosystems. We need to make grassland restoration a chief priority for mitigating the impacts of climate change and protecting the health of our planet.&rdquo;&nbsp;
</blockquote>
<h2>Policy solutions for protecting grasslands&nbsp;</h2>
To protect and restore grasslands, embracing sustainable grassland management and involving local communities in designing and implementing NBS projects is important. Sustainable practices such as grazing management, pasture improvement, rotational grazing and intercropping can mitigate nearly 1.5 GT of carbon emissions by 2030. Moreover, involving local communities can provide valuable insights and expertise, as they have been using nature-based solutions for years. Muneeb Tariq from WWF said,
<blockquote>
 &ldquo;We need to learn from local people who have been using nature as a solution for years and ensure that they are included in the design and implementation of all NBS projects.&rdquo;&nbsp;&nbsp;
</blockquote>
It is essential to support the research, development, and adoption of innovative agricultural practices that can reduce pressure on land and natural resources while ensuring food security. Practices such as sustainable agriculture and improved fertilizer management have the potential to sequester significant amounts of carbon. Educational outreach programs should be implemented to raise awareness of the link between ecosystem health, climate change, and food production. These programs can empower communities to engage in sustainable practices and support the adoption of innovative agricultural practices.&nbsp;
It is also crucial to address the funding gap hindering the expansion of grassland projects. This can be achieved through the implementation of policies that recognize the full range of ecosystem services provided by grasslands such as more holistic trading schemes, tax incentives, and land use zoning. Alexander "Sasha" Wiese from Bankers without Boundaries said, 
<blockquote>
"Financing is the biggest issue facing all NBS projects. Even today, restoration projects are considered a by-product of big infrastructure projects. This shows the extent to which nature-based projects are undervalued. We need to change this by introducing payment for ecosystem services and other similar mechanisms.&rdquo;&nbsp;
</blockquote>
Moreover, government policies should incentivize farmers to adopt sustainable agricultural practices while ensuring that they get rewarded for conserving biodiversity. This would mean implementing effective monitoring mechanisms and redirecting subsidies from intensive agriculture to more eco-friendly sustainable practices. 
<blockquote>
&ldquo;It's crucial to establish appropriate and practical monitoring mechanisms that encourage&nbsp; farmers to adopt sustainable land management practices and conserve biodiversity. Additionally, any management system to preserve species diversity must be supported by subsidies and other incentives, provided there is evidence of its effectiveness,&rdquo; highlighted M&auml;nner.&nbsp;
</blockquote>
There is currently a lack of effective exchange of information and cross-sectoral linkages, especially for early-stage NBS projects. It is therefore important to empower and support high-impact, verified NBS projects through the establishment of knowledge-sharing platforms. 
<blockquote>
&ldquo;To ensure that high-impact projects succeed in slowing down climate change, we need to&nbsp; bridge that gap between companies and NBS project owners and to help scale projects that have a positive impact on climate, biodiversity, and social outcomes&rdquo;, 
</blockquote>
said Chinmaya Thonse from Goodcarbon, in an exchange with Broadpeak.&nbsp;&nbsp;
Lastly, encouraging cross-sectoral collaboration between agriculture, environmental conservation, and educational sectors is crucial to raise awareness about the importance of grassland-related NBS. Dabengwa said:
<blockquote>
&ldquo;Grasslands are often overlooked ecosystems that are commonly viewed as degraded or unimportant areas with little ecological value. However, these ecosystems play an instrumental role in mitigating climate change and maintaining biodiversity. It's time to recognize the value of grasslands and take action to preserve them for future generations.&rdquo;
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illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
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What role can grasslands play in addressing the climate crisis? 

Wetlands have the capacity to sequester and store carbon up to 55 times faster than tropical rainforests, making them more effective carbon sinks than terrestrial forests.

This is Part 2 of a three-part series on Nature-based Solutions. You can find Part 1 <a href="https://illuminem.com/illuminemvoices/what-role-can-forests-play-in-tackling-the-climate-crisis" target="_blank" rel="noopener">here</a>.
Wetlands host nearly 50% of the world&rsquo;s biodiversity and they contain about 35% of the Earth&rsquo;s terrestrial carbon, making them significant carbon sinks. Therefore, they are one of the most important Nature-based Solutions (NBS) for mitigating climate change, protecting biodiversity, and delivering ecosystem services on a global scale.
With our articles and trilogies, we want to share some of the knowledge we gain in the process with our network. In <a href="https://illuminem.com/illuminemvoices/what-role-can-forests-play-in-tackling-the-climate-crisis" target="_blank" rel="noopener">Article 1</a> of our NBS Trilogy, we examined Forests and in Article 3, we explore Grasslands.
<h2>The multifunctionality of wetlands&nbsp;</h2>
Wetlands represent some of the world&rsquo;s most diverse ecosystems, with great potential to be used as NBS to address planetary crises. A wetland is any area of land saturated with water, ranging from rivers and coastal wetlands such as coral reefs and mangroves to human-made wetlands such as reservoirs, fishponds, and canals. <a href="https://www.linkedin.com/in/arghya-chakrabarty-91b97a158/">Arghya Chakrabarty</a> from <a href="https://www.wetlands.org/">Wetlands International</a> highlighted the importance of wetlands by saying, &ldquo;Wetland conservation, restoration and sustainability are proven and efficient nature-based solutions, ensuring the protection of habitats and species while also supporting communities and delivering various ecosystem services like climate mitigation and water security.&rdquo;
Wetlands have a high potential for mitigating climate change and achieving the targets of the Paris Agreement. Despite covering only 6% of the Earth&rsquo;s surface, wetlands store <a href="https://www.azocleantech.com/news.aspx?newsID=33150">33%</a> of the world&rsquo;s soil organic carbon. They have the capacity to sequester and store carbon up to <a href="https://www.un.org/en/observances/world-wetlands-day">55 times</a> faster than tropical rainforests, making them more effective carbon sinks than terrestrial forests. <a href="https://www.linkedin.com/in/adam-teixeira-leite/">Adam Teixeira-Leite</a> from <a href="https://www.erm.com/">Environmental Resources Management </a>shared, &ldquo;One of the key advantages of wetlands is that they can be relatively easy to restore, or at least rehabilitate. Once you &lsquo;fix&rsquo; the hydrology, you're already halfway there. While it might take decades to restore a forest, wetlands can become functional within months or even weeks and quickly start storing carbon, and providing other valuable ecosystem services&rdquo;.
Moreover, wetlands can help achieve adaptation goals as well by increasing communities&rsquo; resilience to climate change. Inland wetlands function like sponges, absorbing and storing excess rainfall to prevent floods and drought. Similarly, coastal wetlands such as mangroves act as shock absorbers, buffering coastlines from extreme weather like cyclones and hurricanes. <a href="https://www.linkedin.com/in/yolandi-schoeman-phd-14479794/">Yolandi Schoeman</a>, a Postdoctoral Fellow at the <a href="https://www.ufs.ac.za/">University of the Free State </a>said, &ldquo;In the coming years, we will experience more extreme weather events like floods, wildfires and droughts. Wetlands can play a major role in climate adaptation and disaster risk mitigation. For instance, wetlands operate as natural tubs, storing overflowing water and thus, protecting vulnerable frontline communities by moderating the impact of floods.&rdquo;&nbsp;
The protection and restoration of wetlands can also help overcome the biodiversity crisis.&nbsp; Since wetlands are transitional zones between terrestrial and aquatic ecosystems, they serve as a network of biological <a href="https://www.iucn.org/events/iucn-event/unpacking-potential-wetlands-addressing-climate-change-and-biodiversity-loss">hotspots</a>, hosting <a href="https://www.iucn.org/news/water/202001/call-ambitious-global-biodiversity-framework-world-wetlands-day-2020#:~:text=Wetland%20ecosystems%20host%20remarkable%20biodiversity,for%20over%201%20billion%20people.">40%</a> of all life forms including plants, animals and microorganisms. They are home to many types of fish and a migratory pit stop for many birds. In addition, mammals like beavers, and even tigers rely heavily on wetlands to find food and shelter. Chakrabarty highlighted, &ldquo;Wetlands provide habitat and food to a great variety of animal species and therefore are a key ally in our fight to stop biodiversity loss. In India, wetlands are habitats for at least 43% of all flora and 40% of all fauna.&rdquo;&nbsp;
Wetlands are also critical for solving the world&rsquo;s water crisis by supplying, purifying and regulating freshwater. They are the <a href="https://medwet.org/2023/03/wetlands-natural-solutions-to-the-water-crisis/">main source</a> of freshwater for many water-stressed communities around the world, especially in <a href="https://www.grida.no/resources/7836">Africa</a>. Wetlands also act as natural <a href="https://www.worldwildlife.org/stories/what-is-a-wetland-and-8-other-wetland-facts">water filter</a>s, cleanse stormwater runoff and supplement wastewater treatment plants for water purification. For example,&nbsp; already back in 1997, New York City <a href="https://www.ramsar.org/sites/default/files/documents/library/services_05_e.pdf">found</a> that it could save between USD 3-8 billion in new wastewater treatment and filtration plants by spending USD 1.5 billion on land purchase and wetland conservation in the watershed. &ldquo;Wetlands are extremely significant ecosystems for maintaining planetary health. Just as forests function as the 'lungs of the earth', wetlands perform the functions of the 'kidneys' by regulating the supply of water through the filtering waste and sediment from the landscape,&rdquo; said <a href="https://www.linkedin.com/in/adam-teixeira-leite/">Teixeira-Leite</a>.&nbsp;
In addition to solving multiple planetary crises, wetlands offer multi-beneficial ecosystem services. The global value of wetland ecosystem services (<a href="https://www.sciencedirect.com/science/article/pii/S0925857417304093">USD 26.4 trillion / year</a>) is still estimated to contribute more than 20% of the total value of ecosystem services globally, exceeding the contributions of terrestrial forests.&nbsp;
Moreover, around <a href="https://www.worldwildlife.org/stories/what-is-a-wetland-and-8-other-wetland-facts#:~:text=Between%20300%20million%20and%20400,%2C%20medicines%2C%20and%20vital%20habitat.">400 million</a> people globally depend on wetlands for food security and livelihoods. <a href="https://www.linkedin.com/in/enock-ole-kiminta-07980a67/">Enock Ole Kiminta</a> from the Kenya National Association of Water Resources Users Associations told us, &ldquo;Wetlands provide food for almost 80% of Africans and are a source of livelihood for many communities. We need to understand the role that wetlands can and do play in creating employment and decent work &ndash; especially for the poorest and most vulnerable people. Wetlands are not wastelands, but wealthlands.&rdquo;
Recently, governments have been stepping up efforts to protect wetlands. At the UN Biodiversity Conference in December 2022, countries agreed on a <a href="https://news.un.org/en/story/2022/12/1131837">landmark deal</a> to protect a third of the planet&rsquo;s lands, coastal areas and inland waters by 2030. Action to restore wetlands is gathering momentum around the world. For example, China is developing the &ldquo;<a href="https://www.unep.org/resources/emerging-issues/emerging-sponge-cities">sponge cities</a>&rdquo; concept, in the face of rapid urbanization and intensified climate hazards, including flooding. Just last month, the largest river and wetland restoration initiative in history was launched at <a href="https://www.wetlands.org/event/wetlands-international-at-the-un-water-conference/#:~:text=The%20UN%20Water%20Conference%20(UNWC,Conference%20in%20half%20a%20century.">UN Water Conference</a>, putting wetlands at the centre of solving the world&rsquo;s worsening water, climate and the biodiversity crisis.
<h2>What threats do wetlands face?</h2>
Despite their multifunctionality and massive potential, there has been a continued and rapid decline in wetlands globally. As much as <a href="https://www.worldwildlife.org/stories/what-is-a-wetland-and-8-other-wetland-facts">87%</a> of the world's wetlands have been lost over the past 300 years, and we are still losing them faster than any other ecosystem. Moreover, wetland vertebrate populations have fallen more than <a href="https://www.researchgate.net/publication/338344940_Bending_the_Curve_of_Global_Freshwater_Biodiversity_Loss_-_An_Emergency_Recovery_Plan">twice</a> as sharply as terrestrial or marine populations. The degradation of wetlands is mainly driven by land conversion for urban development and unsustainable land-use practices. Wetlands are increasingly being drained for urban development like building roads, dams, golf courses and other grey infrastructure. In the absence of wetlands, cities have to spend more money to treat water and prevent floods in nearby communities. Moreover, storm surges from hurricanes can penetrate farther inland, disrupting food supplies and livelihoods.
Wetlands are extremely threatened by the agriculture sector as a result of land conversion, excessive use of pesticides, diversion of water, drainage and infilling. Over the past 20 years, the <a href="https://www.ramsar.org/sites/default/files/documents/library/bn13_agriculture_e.pdf">intensification of agriculture</a> has led to increased destruction of wetlands through the extraction of water for irrigation and pollution due to a rising global trend in fertilizer and pesticide use. Many regions are expanding and intensifying agriculture to meet growing food demand.&nbsp;
<a href="https://www.linkedin.com/in/dianadenke/">Diana Denke</a>, from the <a href="https://faircarbon.org/">Fair Carbon</a>, in an exchange with Broadpeak, said, &ldquo;The world has already lost more than 80% of its former wetlands. Wetlands are mostly drained to clear new land for farmers and the result is horrendous because those peatlands that were carbon sinks before, once you drain them, they become carbon emitters.&rdquo;
Climate change significantly threatens wetlands with rising temperatures and more frequent or intense droughts, storms and floods. UNEP estimates that some <a href="https://news.un.org/en/story/2023/02/1133072">20 to 90%</a> of current coastal wetlands could be gone by the end of the century, depending on the amount of climate-related sea level rise. Moreover, climate change reduced the capacity of wetlands to sequester carbon. A recent <a href="https://www.nature.com/articles/s41558-023-01637-0">study</a>, published in the journal Nature Climate Change, <a href="https://www.chinadaily.com.cn/a/202303/23/WS641b2a11a31057c47ebb5f61.html">found</a> that if the global temperature rises by 1.5 to 2 degrees Celsius, the function of wetlands as carbon sinks will weaken by 57%, and its role in mitigating climate change will greatly weaken. The warming also increased the net emission of methane and nitrous oxide from the wetlands, according to the study.&nbsp;
<h2>It is time for action</h2>
Going forward, we need more effective laws and regulations to protect and restore wetlands and ensure sustainable water management. Preventing wetland degradation through better policies and support for the adoption of <a href="https://www.ramsar.org/sites/default/files/documents/library/bn13_agriculture_e.pdf">sustainable farming</a> is urgently required. Kiminta said, &ldquo;We need policies and regulations that promote the sustainable use of wetlands. We need to enforce polluter pay standards and principles, whereby those who pollute must pay for it and must repair and restore the damage they cause.&rdquo;&nbsp;
In order to effectively address wetland conservation, it is crucial to establish stronger international cooperation, as wetlands may span across national borders and thus necessitate collaboration among multiple countries. In such cases, it may be pertinent to define interstate working arrangements by engaging members from relevant departments. Denke said, &ldquo;Sometimes wetlands can extend across multiple countries. It doesn't really make sense if one part of it is protected by a certain country, but the other is not, as the negative effects will obviously trickle through to other areas as well. Therefore, we need stronger international cooperation and partnerships for NBS-related projects.&rdquo;
More research is required to evaluate how to best use wetlands as&nbsp;
cost-efficient and sustainable NBS to a range of societal challenges. We also need to promote partnerships, especially with universities and research institutions to fill information gaps. Schoeman said, &ldquo;Universities need to play a bigger role in terms of supporting government departments as policy enablers. The role of academia in building capacity and advancing research in wetland management would help promote awareness as well as fill in the knowledge gap to advance sustainable wetland management. &ldquo;
It is essential to close the funding gap that is currently impeding the expansion of wetland projects. To safeguard important wetland ecosystems, we need policies that encourage private sector investments in sustainable supply chains. Moreover, we need to be able to quantify and measure the value of multiple ecosystem services that wetlands provide. <a href="https://www.linkedin.com/in/alexanderwiese/">Alexander "Sasha" Wiese</a> from <a href="https://www.bwb.earth/">Bankers without Boundaries</a> said, "Financing is the biggest issue facing all NBS projects. Even today, restoration projects are considered a by-product of big infrastructure projects. This shows the extent to which nature-based projects are undervalued. We need to change this by introducing payment for ecosystem services and other mechanisms and other similar mechanisms.&rdquo;
Lastly, we should increase public awareness about the importance of wetlands and the challenges they face. Wetlands are often erroneously viewed as unhygienic water dumpsites that harbor diseases and have negative environmental impacts. As a result, we tend to underestimate and undervalue these critical ecosystems. Denke concluded &ldquo;We need to change public perception about wetlands. People continue to undervalue their potential to address some of the world&rsquo;s most pressing sustainability challenges. Wetlands are often considered wasted areas. However, in reality, they play a crucial role in mitigating climate change, preventing biodiversity loss, and providing other essential ecosystem services.&rdquo;
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

How crucial is the role of wetlands as a nature-based solution? (II/III)

We are indeed at war with nature and all wars are by default wars against nature. Nature suffers unavoidably in wars but not much attention has been paid to protecting its rights. The ongoing Russian war in Ukraine and the subsequent destruction of the environment are blatantly telling of our broken relationship with nature.

The forgotten victim: Where does nature stand in times of war?

To ensure the best use of forests, we need to move towards more eco-centric public policies that prioritise nature and realise its true value.

This is Part 1 of a three-part series on Nature-based Solutions. You can find Part 2 <a href="https://illuminem.com/illuminemvoices/how-crucial-is-the-role-of-wetlands-as-a-naturebased-solution" target="_blank" rel="noopener">here</a>.
We are facing multiple intertwined planetary crises, among them climate change, biodiversity loss and water security. Nature-based solutions (NBS) can make a significant contribution and forests serve as one of the largest and most cost-effective NBS in the form of interventions like conservation, reforestation, and sustainable land management. Ramping up NBS linked to forests is a key part of the global drive to race to net zero emissions.
In article 1 of our NBS-Trilogy, we explore the potential and challenges of Forests and their related interventions for moving towards a Net Zero and biodiverse world. <a href="https://illuminem.com/illuminemvoices/how-crucial-is-the-role-of-wetlands-as-a-naturebased-solution" target="_blank" rel="noopener">Article 2</a> is about Wetlands and article 3 is about Grasslands.
<h2>The world&rsquo;s biggest terrestrial carbon sink</h2>
To achieve Net Zero by 2050, a significant contribution from NBS is essential, especially from land-based options. NBS provides one of the best ways to deliver these land-based options through protection, restoration and sustainable management of forests &ndash; the world&rsquo;s biggest terrestrial natural carbon sink. Out of the 37% of the total climate mitigation that NBS can provide in meeting the Paris Agreement, about <a href="https://wedocs.unep.org/xmlui/bitstream/handle/20.500.11822/37318/NBSCCM.pdf">62%</a> is estimated to come from forest-related NBS. As per the OECD, forests are a <a href="https://one.oecd.org/document/ENV/WKP(2021)17/En/pdf">cost-efficient</a>&nbsp;way to offset GHG emissions. Development Expert&nbsp;<a href="https://www.linkedin.com/in/klaus-gihr-b89579151/">Klaus Gihr</a>&nbsp;said, 
<blockquote>
"Forests play an important role in the reduction of GHG emissions. Even if by 2050 decarbonisation has taken place (to the extent technically possible) whereby all the companies have switched from fossil fuel to renewable energy, still there will remain some emissions that cannot be offset at the present level of technology. Here is where forest NBS will play an important role."
</blockquote>
There are three main interventions linked to forests with varying mitigation potential: The first is protecting forests by preventing deforestation to avert stored carbon in trees from releasing into the air. The second is reforestation, which is carried out in areas that have already been impacted by deforestation or desertification. It involves recovering forested areas destroyed in recent times by deforestation or desertification by&nbsp;planting new trees, among other strategies. The third one is sustainable forest management, which envisages reduced logging and longer timber harvest cycles in natural forests; and agricultural options, such as agroforestry. In terms of the mitigation potential of these interventions, there is a <a href="https://wedocs.unep.org/xmlui/bitstream/handle/20.500.11822/37318/NBSCCM.pdf">strong consensus </a>that preventing deforestation holds the greatest mitigation potential. Preventing deforestation avoids emissions, which would take years to recover if the same site were to be reforested.&nbsp;
Forests can contribute to climate mitigation by storing and sequestering carbon and reducing energy demand in cities. They offer a cost-effective alternative to conventional grey infrastructure, delivering long-term climate resilience while providing key health and social benefits. <a href="https://www.linkedin.com/in/bunafsha-mislimshoeva-aa46ab1a/">Bunafsha Mislimshoeva</a>&nbsp;at&nbsp;<a href="https://www.resallience.com/">Resallience</a>&nbsp;by Sixense told us, 
<blockquote>
"In the infrastructure context, the use of NBS is complex in comparison for example to the land use sector. Although the trend of integrating NBS into for example cities is going up, it is far from being the default. We work with local governments, asset owners and other actors to make the best use of the limited space we have in cities for NBS by bringing elements of nature into city infrastructure. Through green and hybrid solutions, cities can reduce or prevent climate change impacts that are accelerating over time."
</blockquote>
Well-designed NBS in forests can improve climate resilience and at the same time deliver multiple&nbsp;<a href="https://op.europa.eu/en/publication-detail/-/publication/6dd4d571-cafe-11ea-adf7-01aa75ed71a1">co-benefits</a>. These benefits include retained and restored ecosystem services from forests that support human health and well-being, biodiversity conservation, and sustainable development.&nbsp;<a href="https://www.linkedin.com/in/timm-tennigkeit-5715121/">Timm Tennigkeit</a>&nbsp;from&nbsp;<a href="https://www.unique-landuse.de/en/">Unique Land Use GmbH</a>&nbsp;stated: 
<blockquote>
"Without NBS, including REDD and forest restoration it is almost impossible to transition to a carbon-neutral economy within the short time period remaining to achieve the objectives of the Paris Agreement. Other than climate mitigation, forests can offer multiple benefits from climate adaptation, food security, and biodiversity protection to livelihood sustenance."
</blockquote>
There is a growing recognition of the importance of forests for addressing climate change, which is harnessing a lot of political and policy traction. At the recent COP27 in Sharm el Sheikh, the Forest and Climate Leaders&rsquo; Partnership was&nbsp;<a href="https://unfccc.int/news/cop27-leaders-boost-sustainable-forest-management">launched</a> to boost action to implement a commitment made by over 140 countries to halt forest loss and land degradation by 2030 and to convert ambition into results on the ground. Moreover, developing countries are taking concrete actions to protect forests under the Reducing Emissions from Deforestation and Forest Degradation (REDD+) framework.
In addition to being recognised for their role in building climate resilience, forests are garnering much attention for preventing the biodiversity crisis. At&nbsp;<a href="https://fsc.org/en/newscentre/fsc-at-cop-15-highlighting-forest-stewardship-as-a-biodiversity-solution">COP15</a>&nbsp;in Montr&eacute;al, Forest Stewardship was highlighted as a critical biodiversity solution as forests host around&nbsp;<a href="https://unece.org/circular-economy/press/europe-and-north-america-must-step-make-cop-15-historic-push-biodiversity">80%</a>&nbsp;of the world&rsquo;s terrestrial biodiversity, making their sustainable management a strategic priority.
<h2>The challenges and risks</h2>
Forests are one of the&nbsp;<a href="https://www.worldwildlife.org/stories/what-are-nature-based-solutions-and-how-can-they-help-us-address-the-climate-crisis#:~:text=Forests%20are%20one%20of%20the,removing%20carbon%20from%20the%20atmosphere.">best examples</a>&nbsp;of NBS but they are increasingly threatened by high levels of deforestation and climate change-caused natural disasters like wildfires. One of the biggest drivers of deforestation is intensive agriculture. Regardless of the negative impacts on nature, governments around the globe are subsidising intensive agriculture and exempting it from their low emission trajectories and targets. Moreover, increasing severe heat and drought due to climate change has substantially&nbsp;<a href="https://www.epa.gov/climate-indicators/climate-change-indicators-wildfires">increased</a>&nbsp;the threat of wildfires that release a tremendous amount of CO2 into the air and destroy biodiversity in addition to economic and livelihood loss. Therefore, replacing nature-harming practices with sustainable forest and land use management practices is vital.
The rights of local people are another major challenge that needs to be taken into consideration while implementing NBS projects. Poorly designed NBS schemes can have adverse impacts on nature as well as on local communities. In some instances, NBS can even contradict the rights of indigenous communities: &ldquo;In some cases, projects mislabelled as NBS are increasing the vulnerability of people to climate disasters instead of decreasing it, resulting in maladaptation practices. This happens when the socio-cultural context and local challenges are ignored in the process of addressing global solutions. In some cases, it could be that climate change is a global priority and we sometimes forget it may not be the most pressing challenge at the local level,&rdquo; said NBS specialist&nbsp;<a href="https://www.linkedin.com/in/diego-portugal-del-pino/">Diego Portugal Del Pino</a>.
The business case for forests can be difficult for investors, with returns usually accumulating only over the long term. Currently, the investments into NBS are approximately&nbsp;<a href="https://www.unep.org/news-and-stories/press-release/doubling-finance-flows-nature-based-solutions-2025-deal-global">USD 154 billion/year</a>. This amount needs to be doubled by 2025 to reach climate, biodiversity, and land degradation goals. Portugal Del Pino said, 
<blockquote>
"It is important to highlight that nature is perceived differently by diverse groups of people. Mostly, there is an emphasis on prioritizing monetary ecosystem services over other non-monetary services, for example, cultural and aesthetic values given by nature. We fail to take into account a plural valuation of nature that goes beyond economic profits."
</blockquote>
<h2>Thoughts on the outlook</h2>
To ensure the best use of forests, we need to move towards more eco-centric public policies that prioritise nature and realise its true value. Governments can help by putting policies in place to incentivize ecosystem restoration, prevent deforestation from agriculture, and improve long-term land use planning. This would include directing government subsidies to NBS. Currently, most <a href="https://www.mdpi.com/2071-1050/14/23/15859">subsidies</a> in agriculture are directed towards intensive livestock, fossil fuel, synthetic fertilizers, and diesel subsidies that are promoting deforestation and increasing GHG emissions. To prevent deforestation from agriculture, we need to adopt more eco-forestry practices. There needs to be a shift from intensive agriculture to sustainable practices like agroforestry. Adding trees to agricultural lands is <a href="https://www.tandfonline.com/doi/full/10.1080/24749508.2020.1743528">proven</a>&nbsp;to have greater potential than reforestation.
Moreover, governments must implement effective land use policies. Sustainable&nbsp;<a href="https://www.cnu.org/publicsquare/2021/11/03/climate-adaptation-mitigation-and-urban-design">urban planning</a> and design can help address both mitigation and adaptation challenges.&nbsp;<a href="https://www.linkedin.com/in/cecil-konijnendijk-2038201/">Cecil Konijnendijk</a>&nbsp;from the&nbsp;<a href="http://nbsi.eu/">Nature Based Solutions Institute</a> specified, 
<blockquote>
"We need to drastically change our way of thinking on how cities are planned, designed, and managed. Green infrastructure needs to be an integral part of city planning and structure. We are still in a situation where cities are losing trees and green space, while climate challenges are increasing. We also need to become better at aligning policies. Urban forest policies and climate policies, for example, can be coordinated much better. There is often still too much silo thinking in city administrations. Cities like Copenhagen are changing this, creating cross-sectoral plans and structures for dealing with climate change."
</blockquote>
It is also critical to&nbsp;<a href="http://nativeplantsocietyofus.org/ecosystem-services-resources/">prevent inappropriate tree planting</a>&nbsp;on naturally open ecosystems such as grasslands and peatlands, which are vital for climate mitigation as well as for protecting biodiversity. Moreover, replacements of native forests with plantations or&nbsp;<a href="https://www.fao.org/forestry/aliens/52523/en/">alien</a> tree species must be carefully monitored as they can sometimes hinder the establishment of naturally regenerating forests. Tennigkeit told us,
<blockquote>
"To be sustainable, forestry investments require economies of scale. The matchmaking between the site (its climate, soil type, altitude), the tree species (its growth, utilization features, market prices), and the market (distance from site, market size, prevailing buyers&rsquo; demand) is key to achieving sustainable investment goals. We need proper monitoring and evaluation systems and ensure accountability."
</blockquote>
The funding gap for forests needs to be filled by tapping into natural capital. The&nbsp;<a href="https://www.unep.org/resources/emissions-gap-report-2022">Emissions Gap Report</a> 2022 by UNEP provides evidence that more finance is needed for the restoration of natural forests and afforestation. We need to develop business models for NBS projects to incentivize private investors to invest in them. &ldquo;Private investments can support NBS projects at every stage of development, from early-stage pilots to scaling. At Earthly, we are helping bridge the funding gap for nature by accelerating investments into high-integrity, high-impact NBS projects. We help companies understand project quality and drive commercial returns on investment from their sustainability efforts,&rdquo; explained&nbsp;<a href="https://www.linkedin.com/in/olivia-crowe/">Olivia Crowe</a> from <a href="https://earthly.org/">Earthly</a>.
Moreover, a proportion of the necessary finance could be delivered through the responsible use of forest offsets. Currently, the price per forest carbon credit is&nbsp;<a href="https://www.greenbiz.com/article/inside-look-pricing-forest-carbon-market">still not high enough</a>&nbsp;to include other forest services like biodiversity and social benefits. Therefore, we need to increase the price of forest carbon credits.&nbsp;In addition, there is a need to improve the transparency of these voluntary carbon markets to ensure that they represent genuine emissions reductions. The recent&nbsp;<a href="https://sgvoice.energyvoice.com/strategy/research/23848/verra-credibility-crisis-highlights-fragility-of-the-carbon-market/">controversy on carbon credit accounting</a>&nbsp;sheds light on the fragility of the voluntary offsets market that will likely cause investors to lose confidence in carbon credits. Therefore, strict transparency and monitoring mechanisms are needed to ensure investors&rsquo; confidence and funding.&nbsp;
Lastly, we must improve planning around NBS to ensure that they are utilised to their full potential and offer benefits for nature as well as humans.&nbsp;<a href="https://www.linkedin.com/in/johnrobpool/">John-Rob Pool</a>&nbsp;from the&nbsp;<a href="https://www.wri.org/?utm_source=linkedin&amp;utm_medium=world+resources+institute&amp;utm_campaign=socialmedia&amp;utm_term=e2179cd0-98e2-4a26-8faf-eb92965dbe69">World Resources Institute</a> provided a good closing statement by saying:
<blockquote>
"So long as NBS are carefully planned so that they are contextually relevant, with maintenance costs accounted for and clear goals in mind, NBS are a no-regrets strategy for national and sub-national governments to leverage the power of nature for human well-being. NBS can benefit mental and physical health, water security, and biodiversity preservation, all while contributing to mitigating future climate change."
</blockquote>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

What role can forests play in tackling the climate crisis? (I/III)

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.

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.
Ramping up Tech-Based Solutions (TBS) 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 <a href="https://illuminem.com/illuminemvoices/3e7c1251-fc95-4175-b92e-ab1ddea3cb7b">first</a> and <a href="https://illuminem.com/illuminemvoices/64fedb4b-d85d-483c-a3e3-81f24bd62bbd">second</a> articles of the TBS Trilogy here.
<h2>The ultimate carbon technology?</h2>
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 <a href="https://www.archdaily.com/972254/the-potential-of-bamboo-and-mass-timber-for-the-construction-industry-an-interview-with-pablo-van-der-lugt">50%</a> compared to traditional buildings. Currently, the tallest timber building in the world, <a href="https://www.skyscrapercenter.com/building/mjostarnet/26866">Mjostarnet</a>, is about 85 meters tall and has 18 floors.
In an exchange with Broadpeak, <a href="https://www.linkedin.com/in/frank-vasek-21377b151/">Frank Vasek</a>, Head of Carbon Solutions at <a href="https://timberfinance.ch/english/">Timber Finance</a>, said,
<blockquote>&ldquo;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.&rdquo;</blockquote>
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&rsquo;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&rsquo;s CO2 footprint.
Buildings using mass timber can help offset the negative impacts of urbanization by replacing concrete and steel urban houses. According to Abhijeet Mishra, Associate Research Fellow at Potsdam Institute for Climate Impact Research (PIK), "Urban homes made out of wood could play a vital role in climate change mitigation due to their long-term carbon storage potential.&rdquo;
Wooden buildings hold great potential for becoming long-lasting carbon sinks. The findings of a <a href="https://www.nature.com/articles/s41467-022-32244-w">study</a> conducted by PIK suggest that building future cities from engineered wood could prevent 106 billion tons of CO2 from entering the Earth&rsquo;s atmosphere by 2100. Similarly, in Europe, wooden buildings have the potential to store <a href="https://carbonherald.com/how-buildings-made-of-wood-can-help-fight-climate-change/">420 million metric tons of CO2</a> over the next 20 years. This is equivalent to emissions from 108 coal plants in a year. Another <a href="https://www.sciencedirect.com/science/article/pii/S2666165920300260">study</a> 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, <a href="https://www.archdaily.com/tag/mass-timber">mass timber</a> 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 <a href="https://www.archdaily.com/972254/the-potential-of-bamboo-and-mass-timber-for-the-construction-industry-an-interview-with-pablo-van-der-lugt">two times</a> 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 <a href="https://woodforgood.com/news-and-views/2018/07/04/the-healing-power-of-wood-in-healthcare-buildings/">proven</a> 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 <a href="https://www.bbc.com/future/article/20190717-climate-change-wooden-architecture-concrete-global-warming">15% and 28%</a> 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 <a href="https://www.euronews.com/green/2022/03/28/sweden-s-innovative-wooden-skyscraper-captures-as-much-carbon-as-10-000-forests">20%</a> of all new multi-floor buildings in Sweden. In an exchange with Broadpeak, development expert <a href="https://www.linkedin.com/in/klaus-gihr-b89579151/">Klaus Gihr</a> said:
<blockquote>&ldquo;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 <a href="https://www.newyorker.com/magazine/2022/04/25/transforming-trees-into-skyscrapers">Norway</a>, <a href="https://www.dezeen.com/2021/11/02/amsterdam-new-buildings-20-per-cent-timber/">the Netherlands</a> and <a href="https://techclusterzug.ch/projektpi">Switzerland</a>, high <a href="https://www.moelven.com/mjostarnet/">skyscrapers</a> are being built using wood.&rdquo; </blockquote>
<h2>Criticism of a wooden future</h2>
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. <a href="https://www.linkedin.com/in/johnrobpool/">John-Rob Pool</a>, Global Implementation Manager, Cities4Forests at <a href="https://www.wri.org/?utm_source=linkedin&amp;utm_medium=world+resources+institute&amp;utm_campaign=socialmedia&amp;utm_term=e2179cd0-98e2-4a26-8faf-eb92965dbe69">World Resources Institute</a>, told us,
<blockquote>&ldquo;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.&rdquo;</blockquote>
Moreover, 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, <a href="https://www.linkedin.com/in/praveenguptafcii/">Praveen Gupta</a>, told us,
<blockquote>&ldquo;There is no denying &shy;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&nbsp;<a href="https://indianexpress.com/article/express-exclusive/conflict-wood-myanmar-teak-us-eu-markets-via-india-8475459/">Burma teak</a>&nbsp;finds its way into the US and Europe via India. Likewise, recent <a href="https://indianexpress.com/article/explained/explained-climate/forests-under-threat-deforestation-investigation-8478180/">investigations</a> have revealed what a&nbsp;sham&nbsp;green certification is. Unless the widespread greenwashing is brought under control, we will have no ancient forests left.&rdquo;</blockquote>
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. &ldquo;People have no idea that mass timber in Europe comes from sustainably managed production forests, mostly with FSC and PEFC certification,&rdquo; explained architectural engineer <a href="https://www.linkedin.com/in/pablovanderlugt/">Pablo van der Lugt</a>.
Moreover, detractors argue that wood is not as strong or safe as concrete. In reality, wooden buildings made using CLT are equally, if not more, robust, safe and fire-resistant than concrete buildings. &ldquo;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,&rdquo; said Gihr.
<h2>How to scale low-carbon construction?</h2>
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.
<blockquote>&ldquo;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,&rdquo; explained Vasek.</blockquote>
Moreover, building codes and regulations that disadvantage light building methods such as mass timber need to be <a href="https://builtbn.org/latest-posts/built-by-nature-announces-pablo-van-der-lugt-as-latest-board-addition/">adapted</a> 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. &ldquo;Strong governance and careful planning are required to limit negative impacts on biodiversity and to ensure a sustainable transition to timber cities,&rdquo; said Mishra.
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&rsquo;s vital to ensure that the supply of wood is sustainable &ndash; wood must be sourced from sustainably managed and certified forests to prevent the risk of illegal logging and deforestation. &ldquo;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,&rdquo; stressed Gihr.
Van der Lugt provides a succinct outlook:
<blockquote>&ldquo;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 &mdash; design competitions, demonstrations, documentaries &mdash; reaching the right target groups.&rdquo;</blockquote>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.
<h6>Photo by <a href="https://unsplash.com/@etiennegirardet?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Etienne Girardet</a> on <a href="https://unsplash.com/photos/T_fYMj6H-pE?utm_source=unsplash&amp;utm_medium=referral&amp;utm_content=creditCopyText">Unsplash</a>​</h6>

Racing Net Zero (III/III): how can wooden buildings support the Net Zero transition?

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.

<h2>How can Direct Air Capture help meet the Net Zero goal?</h2>
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 <a href="https://www.mckinsey.com/capabilities/sustainability/our-insights/sustainability-blog/now-the-ipcc-has-recognized-that-carbon-removals-are-critical-to-addressing-climate-change-its-time-to-act">6 billion tons</a> of carbon dioxide (CO2) from the air every year by 2050 if we want to limit global warming to 1.5 &deg;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 <a href="https://illuminem.com/illuminemvoices/3e7c1251-fc95-4175-b92e-ab1ddea3cb7b">here</a>.
<h2>Removing emissions using Direct Air Capture</h2>
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. <a href="https://www.linkedin.com/in/simon-g%C3%B6%C3%9F-aa98885a/">Simon G&ouml;&szlig;</a>, Co-CEO of <a href="https://carboneer.earth/de/home-de/">Carboneer</a>, while speaking to Broadpeak said, &ldquo;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.&rdquo;
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. <a href="https://www.linkedin.com/in/roberthoglund/">Robert H&ouml;glund</a>, Climate Advisor at <a href="https://www.marginalcarbon.com/">Marginal Carbon AB</a>, told us, &ldquo;CDR solutions like DAC&ndash; where carbon is removed from the air and stored permanently &ndash; 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.&rdquo;
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 <a href="https://www.globalccsinstitute.com/wp-content/uploads/2020/06/JF_ICEF_DAC_Roadmap-20181207-1.pdf">600&nbsp;m3 of water</a> for each metric ton of CO2 removed while evaporative losses from DAC are less than 25&nbsp;m3/tCO2. &ldquo;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,&rdquo; explained <a href="https://www.linkedin.com/in/nick-hammer-3a350a4a/">Nick Hammer</a>, Program Associate at <a href="https://daccoalition.org/">Direct Air Capture Coalition</a>.
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 <a href="https://www.energy.gov/sites/default/files/2021-12/FECM%20Infrastructure%20Factsheet.pdf">USD 3.5 billion</a> 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 <a href="https://www.negative-emissions.org/orca-launch-and-dac-summit-2021">Orca</a>, the largest operating DAC plant globally.
<h2>On the other side of the fence</h2>
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 href="https://thirdbridge.com/carbon-capture-and-storage-direct-air-capture-2022-outlook/">USD&nbsp;600 and USD&nbsp;1000</a> a ton - that needs to be brought down to USD&nbsp;100/ton to become cost-competitive. &ldquo;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.&rdquo; said G&ouml;&szlig;.
In response to the price argument, <a href="https://www.linkedin.com/in/nathalie-casas-73a1879a/">Nathalie Casas</a>, Head of R&amp;D at <a href="https://climeworks.com/">Climeworks</a> told us, &ldquo;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.&rdquo;
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, <a href="https://www.linkedin.com/in/julia-levin-73163a42/">Julia Levin</a>, Associate Director at <a href="https://environmentaldefence.ca/">Environmental Defence</a>, said, &ldquo;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.&rdquo;
<a href="https://www.linkedin.com/in/anna-ahn3/">Anna Ahn</a>, Corporate Communication Manager at <a href="https://climeworks.com/">Climeworks</a>, negated claims about DAC being used as a license to pollute by saying, &ldquo;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.&rdquo;
Questions are raised on the scalability and cost-effectiveness of tech-based solutions and comparisons are drawn between them and nature-based solutions. <a href="https://www.linkedin.com/in/engr-muneeb-tariq/">Muneeb Tariq</a>, NBS Specialist at the <a href="https://www.wwfpak.org/">WWF</a>, said, &ldquo;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.&rdquo;
<h2>Scaling DAC to reach Net Zero</h2>
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 <a href="https://www.iea.org/reports/direct-air-capture-2022/executive-summary">85 million tons of CO2</a> in 2030, and 980 million tons in 2050. However, DAC plants currently remove around 10,000 tons of CO2 per year. According to Ahn, &ldquo;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!&rdquo;
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 href="https://www.catf.us/2022/08/the-inflation-reduction-act-creates-a-whole-new-market-for-carbon-capture/">USD&nbsp;180</a> 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. <a href="https://www.linkedin.com/in/chris-minter-1355ba17/">Chris Minter</a>, Sustainable Supply Chain Lead at <a href="https://www.zurich.com/">Zurich Insurance</a>, told us, &ldquo;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.&rdquo;
H&ouml;glund puts DAC in another perspective saying: &ldquo;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.&rdquo;
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

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).

<h2>What role can carbon capture and storage play in meeting climate goals?</h2>
As global carbon dioxide (CO2) emissions continue to rise, it&rsquo;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).
<h3>Is carbon capture and storage a game changer?</h3>
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. &ldquo;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,&rdquo; said <a href="https://www.linkedin.com/in/henrik-utvik-55a54329/">Henrik Utvik</a>, Founder &amp; President &amp; CTO at <a href="https://aqualung-cc.com/">Aqualung Carbon Capture</a>.
Although CCS has been around for decades, it has never really taken off. In its recent <a href="https://www.catf.us/2022/04/what-does-latest-ipcc-report-say-about-carbon-capture/">report</a>, 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&deg;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 <a href="https://www.cell.com/one-earth/pdf/S2590-3322(21)00541-8.pdf">15%</a> of the cumulative emissions reductions needed to meet the Net Zero target by 2050.
While speaking to Broadpeak, <a href="https://www.linkedin.com/in/lionel-dubois-76644b20/">Lionel Dubois</a>, Senior Researcher at the <a href="https://web.umons.ac.be/en/">University of Mons</a> highlighted the significance of CCS in the following words: &ldquo;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.&rdquo;
CCS has the potential to deliver deep decarbonisation in hard-to-abate sectors by capturing more than <a href="https://ec.europa.eu/research-and-innovation/en/horizon-magazine/storing-co2-underground-can-curb-carbon-emissions-it-safe">90%</a> 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 <a href="https://www.globalccsinstitute.com/wp-content/uploads/2021/03/Global-Status-of-CCS-Report-English.pdf">reports</a>, 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 <a href="https://www.sciencedirect.com/science/article/pii/S1876610219312354">140%</a>, 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 <a href="https://www.weforum.org/agenda/2019/03/why-carbon-capture-could-be-the-game-changer-the-world-needs/">USD 40 per tonne</a> of CO2, providing a solid foundation for scaling up CCS deployment.
Globally, there is growing traction for CCS. Plans for more than <a href="https://www.iea.org/reports/ccus-in-clean-energy-transitions/a-new-era-for-ccus">30</a> 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, <a href="https://www.wri.org/update/45q-enhancements#:~:text=45Q%2C%20a%20tax%20credit%20for,products%20through%20CO2%20utilization.">Section 45Q</a> of the US Internal Revenue Code provides a tax credit for carbon storage. The <a href="https://www.iea.org/policies/4986-section-45q-credit-for-carbon-oxide-sequestration">2022 changes</a> 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.
<h3>Critics uphold that carbon capture is a mirage</h3>
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 <a href="https://pure.manchester.ac.uk/ws/portalfiles/portal/184755890/CCS_REPORT_FINAL_v2_UPLOAD.pdf">report</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&rsquo;s flagship projects, <a href="https://ricochet.media/en/3928">Boundary Dam 3</a>, initially promised a capture rate of 90% but it has never met this goal. By end of 2021, the facility captured roughly <a href="https://www.vice.com/en/article/g5q573/the-worlds-only-coal-carbon-capture-plant-is-regularly-breaking">44%</a> of Boundary Dam&rsquo;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 <a href="https://www.globalwitness.org/en/campaigns/fossil-gas/world-cannot-meet-climate-targets-relying-carbon-capture-and-storage/">costs</a> 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 href="https://www.weforum.org/agenda/2022/10/3-reasons-why-future-of-carbon-capture-looks-promising/">investing</a> heavily in CCS projects. &ldquo;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,&rdquo; highlighted <a href="https://www.linkedin.com/in/julia-levin-73163a42/">Julia Levin</a>, Associate Director of National Climate at <a href="https://environmentaldefence.ca/">Environmental Defence</a>.
Some experts also argue that CCS technologies allow carbon emitters to continue polluting the environment. A <a href="https://www.ciel.org/wp-content/uploads/2021/07/Confronting-the-Myth-of-Carbon-Free-Fossil-Fuels.pdf">report</a>published by CIEL concluded that CCS technologies prolong reliance on the fossil fuel industry. Moreover, about <a href="https://ieefa.org/resources/carbon-capture-has-long-history-failure">80%</a> 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 <a href="https://priceofoil.org/2021/07/19/500-groups-letter-reject-carbon-capture-storage/">open letter</a>, opposed government support for CCS, arguing that it is a &ldquo;false solution&rdquo; that allows companies to greenwash their image by permitting a business-as-usual approach. &ldquo;CCS is life support for the fossil fuel industry &ndash; a fairy tale solution that distracts from real climate solutions needed for a rapid transformation away from fossil fuels to prevent major climate catastrophes,&rdquo; stressed Levin.
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. &ldquo;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,&rdquo; emphasized, <a href="https://www.linkedin.com/in/arthur-vanderschooten-4a4b3725/">Arthur Vanderschooten</a>, Vice President and Co-founder of <a href="https://www.imperativeinc.com/">Imperative Global</a>.
<h3>What is the way forward from a policy perspective?</h3>
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. <a href="https://www.linkedin.com/in/chris-minter-1355ba17/">Chris Minter</a>, Sustainable Supply Chain Lead at <a href="https://www.zurich.com/">Zurich Insurance</a>, explained, &ldquo;Even if carbon removal or capture is attached to fossil fuel that&rsquo;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.&rdquo;
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: &ldquo;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.&rdquo;
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

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.

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 <a href="https://illuminem.com/illuminemvoices/10ccf647-21f8-4a4e-a36b-a07a3c766c9d">here (part 1)</a> and <a href="https://illuminem.com/illuminemvoices/eef26e1e-cf8f-452f-a7b6-3b6deda0b511">here (part 2)</a>.
<h2>The hardest nut to crack</h2>
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 <a href="https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors">about 30%</a>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.
&ldquo;Green hydrogen will have an important role to play in the energy transition,&rdquo; saidThorsten Schneider, Head of Division at <a href="https://www.kfw-entwicklungsbank.de/International-financing/KfW-Entwicklungsbank/">KfW Development Bank</a>, in an interview with Broadpeak. &ldquo;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.&rdquo;
One of the biggest emitters in HTA sectors is the steel industry, responsible for around <a href="https://www.rolandberger.com/en/Insights/Publications/Europe's-steel-industry-at-a-crossroads.html">5%</a> of the carbon emissions in Europe and around <a href="https://www.globalefficiencyintel.com/steel-climate-impact-international-benchmarking-energy-co2-intensities#:~:text=The%20iron%20and%20steel%20industry,doubled%20between%202000%20and%202020.">7%</a> 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&rsquo;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. <a href="https://corporate.arcelormittal.com/">ArcelorMittal</a>, the largest steel manufacturer in Europe and America, recently <a href="https://corporate.arcelormittal.com/media/news-articles/arcelormittal-successfully-tests-partial-replacement-of-natural-gas-with-green-hydrogen-to-produce-dri">announce</a>d that it has successfully tested the use of green hydrogen in the production of direct reduced iron (&ldquo;DRI&rdquo;) 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. <a href="https://www.linkedin.com/in/nadimchaudhry/">Nadim Chaudhry</a>, Founder and Director at <a href="https://www.worldhydrogenleaders.com/">World Hydrogen Leaders</a>, told us, &ldquo;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.&rdquo;
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 <a href="https://internationalbanker.com/finance/why-saudi-arabia-is-primed-to-become-a-global-leader-in-hydrogen-supply/">Saudi Arabia</a> and <a href="https://theconversation.com/australia-plans-to-be-a-big-green-hydrogen-exporter-to-asian-markets-but-they-dont-need-it-179381#:~:text=Australia%20plans%20to%20be%20a%20top%2Dthree%20exporter%20of%20hydrogen,gas%20emissions%20down%20to%20zero.">Australia</a> 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.
The <a href="https://www.rolandberger.com/en/Insights/Publications/Unlocking-Hydrogen-Growth-in-the-Middle-East.html?btc=SA">Middle East</a> 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. <a href="https://www.linkedin.com/in/janfrederikbraun/">Jan Frederik Braun</a>, Senior Expert Hydrogen Economy at <a href="https://www.fraunhofer.de/en.html">Fraunhofer</a> while speaking to us said, &ldquo;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.&rdquo;
<h2>Green hydrogen comes with its own challenges</h2>
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 &lsquo;hydrogen-ready&rsquo;, 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 <a href="https://www.enbw.com/">EnBW</a> (Energie Baden-W&uuml;rttemberg AG), for instance, is currently building hydrogen-ready gas-fired plants that will be commissioned in 2025 and switched to run on hydrogen by <a href="https://www.siemens-energy.com/global/en/news/magazine/2022/hydrogen-ready.html">2030</a>. However, the challenge remains &ndash; availability in sufficient quantities at affordable pricing.
The <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/experts-explain-why-green-hydrogen-costs-have-fallen-and-will-keep-falling-63037203">estimated cost</a> of green hydrogen is between USD&nbsp;<a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/experts-explain-why-green-hydrogen-costs-have-fallen-and-will-keep-falling-63037203">3/kg to USD&nbsp;6.55/kg</a> which is considerably higher than the cost of its alternatives like grey hydrogen which is around <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/experts-explain-why-green-hydrogen-costs-have-fallen-and-will-keep-falling-63037203">USD 1.80/kg</a>. 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. &ldquo;Ammonia and oil refinery are two major markets that can be leveraged to scale up green hydrogen and pull it down its cost curve,&rdquo; highlighted Chaudhry.
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. &ldquo;Green hydrogen may come at a great cost to the environment and local communities,&rdquo; says <a href="https://www.linkedin.com/in/andreasgoldthau/">Andreas C. Goldthau</a>, Director of the <a href="https://www.uni-erfurt.de/brandtschool">Willy Brandt School of Public Policy</a> at University Erfurt. &ldquo;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.&rdquo;
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. &ldquo;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,&rdquo; emphasized Braun.
<h2>Where do we go from here?</h2>
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. &ldquo;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,&rdquo; explained Goldthau.
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.
<h3>References:</h3>
<ul>
<li>Blakers, A., &amp; Cheng, C. (2022). Australia plans to be a big green hydrogen exporter to Asian markets &ndash; but they don&rsquo;t need it. The Conversation. <a href="http://theconversation.com/australia-plans-to-be-a-big-green-hydrogen-exporter-to-asian-markets-but-they-dont-need-it-179381">http://theconversation.com/australia-plans-to-be-a-big-green-hydrogen-exporter-to-asian-markets-but-they-dont-need-it-179381</a>​</li>
</ul>
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<li>DiChristopher, T. (2021). Experts explain why green hydrogen costs have fallen and will keep falling. <a href="https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/experts-explain-why-green-hydrogen-costs-have-fallen-and-will-keep-falling-63037203">https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/experts-explain-why-green-hydrogen-costs-have-fallen-and-will-keep-falling-63037203</a>​</li>
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<li>Europa, B. (2021). Hydrogen in steel production: What is happening in Europe &ndash; part two. Bellona.Org. <a href="https://bellona.org/news/industrial-pollution/2021-05-hydrogen-in-steel-production-what-is-happening-in-europe-part-two">https://bellona.org/news/industrial-pollution/2021-05-hydrogen-in-steel-production-what-is-happening-in-europe-part-two</a>​</li>
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<li>Hasanbeigi, A. (2023). Steel Climate Impact&mdash;An International Benchmarking of Energy and CO2 Intensities. Global Efficiency Intelligence. <a href="https://www.globalefficiencyintel.com/steel-climate-impact-international-benchmarking-energy-co2-intensities">https://www.globalefficiencyintel.com/steel-climate-impact-international-benchmarking-energy-co2-intensities</a>​</li>
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<li>Ito, A. (2020). Europe&rsquo;s steel industry at a crossroads. Roland Berger. <a href="https://www.rolandberger.com/en/Insights/Publications/Europe's-steel-industry-at-a-crossroads.html">https://www.rolandberger.com/en/Insights/Publications/Europe's-steel-industry-at-a-crossroads.html</a>​</li>
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<li>Kourkejian, V. (2023). Unlocking Hydrogen Growth in the Middle East. Roland Berger. https://www.rolandberger.com/en/Insights/Publications/Unlocking-Hydrogen-Growth-in-the-Middle-East.html</li>
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<li>Morgan, H. (2022). OPINION | Why market dynamics will reduce the average price of green hydrogen to $1.50/kg by 2030 | Recharge. Recharge | Latest Renewable Energy News. <a href="https://www.rechargenews.com/energy-transition/opinion-why-market-dynamics-will-reduce-the-average-price-of-green-hydrogen-to-1-50-kg-by-2030/2-1-1292801">https://www.rechargenews.com/energy-transition/opinion-why-market-dynamics-will-reduce-the-average-price-of-green-hydrogen-to-1-50-kg-by-2030/2-1-1292801</a>​</li>
</ul>
<ul>
<li>Nault, K. (2022). Clean Hydrogen: A long-awaited solution for hard-to-abate sectors. <a href="https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors">https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors</a>​</li>
</ul>
<ul>
<li>Springfield, C. (2022). Why Saudi Arabia Is Primed to Become a Global Leader in Hydrogen Supply. International Banker. <a href="https://internationalbanker.com/finance/why-saudi-arabia-is-primed-to-become-a-global-leader-in-hydrogen-supply/">https://internationalbanker.com/finance/why-saudi-arabia-is-primed-to-become-a-global-leader-in-hydrogen-supply/</a>​</li>
</ul>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

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.

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&rsquo;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&nbsp;<a href="https://illuminem.com/illuminemvoices/10ccf647-21f8-4a4e-a36b-a07a3c766c9d">here</a>.
<h2>The fuel of the future?</h2>
The transportation sector is the second-largest carbon emitter, after electricity and heat generation, accounting for about&nbsp;<a href="https://www.belfercenter.org/publication/sustainable-mobility-renewable-hydrogen-transport-sector">25%</a>&nbsp;of global emissions. Produced using renewable energy, green hydrogen and its derivatives &mdash; also known as &ldquo;e-fuels&rdquo;&mdash; such as ammonia, methanol and synthetic kerosene &mdash; 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&mdash; according to an&nbsp;<a href="https://www.hydrogeninsight.com/analysis/green-hydrogen-vital-for-net-zero-europe-but-only-for-aviation-shipping-and-industry-says-energy-system-study/2-1-1385116">academic study</a>&nbsp;modelling the most cost-effective path to net-zero emissions by 2050.
The aviation sector is responsible for&nbsp;<a href="https://www.rechargenews.com/energy-transition/timing-is-key-green-hydrogen-could-supply-32-of-aviation-energy-demand-by-2050/2-1-1263675">2%</a>&nbsp;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,&nbsp;<a href="https://www.airbus.com/en">Airbus</a>&nbsp;has committed to launching at least one zero-emission commercial hydrogen plane by&nbsp;<a href="https://www.rechargenews.com/energy-transition/timing-is-key-green-hydrogen-could-supply-32-of-aviation-energy-demand-by-2050/2-1-1263675">2035</a>. The European plane manufacturer also estimates that hydrogen has the potential to reduce carbon emissions in aviation by up to&nbsp;<a href="https://www.rechargenews.com/transition/blue-skies-airbus-plans-for-hydrogen-powered-passenger-jet-by-2035/2-1-878882">50%</a>.
The maritime sector is another hard-to-abate sector that currently accounts for 3% of global carbon emissions but is expected to grow to&nbsp;<a href="https://climatechampions.unfccc.int/green-hydrogen-and-green-shipping/">50%</a>&nbsp;by 2050, making it highly critical for the energy transition. Since this sector is hard-to-electrify, a more cost-effective decarbonisation solution could be using low-carbon fuels like green ammonia produced from green hydrogen. At the recent COP27, ten leading organizations across the shipping value chain signed a&nbsp;<a href="https://climatechampions.unfccc.int/green-hydrogen-and-green-shipping/">joint statement</a>&nbsp;committing to rapid production of low-carbon fuels based on green hydrogen to accelerate the decarbonisation of global shipping.
Given the potential of green hydrogen to decarbonize the transport sector, it is gaining traction globally. Recently, members of the European Parliament decided to support a&nbsp;<a href="https://hydrogen-central.com/members-european-parliament-have-decided-support-hydrogen-based-green-transition-transport-sector/">hydrogen-based green transition</a>&nbsp;in the transport sector.&nbsp;"Green hydrogen is indispensable for a decarbonised economy. Especially in the transport sector, green hydrogen will be pivotal in making our mobility carbon neutral by 2050" highlighted&nbsp;<a href="https://www.linkedin.com/in/ismail-ertug-mep-ba0a4228/">Ismail Ertug</a>, member of the&nbsp;<a href="https://www.europarl.europa.eu/portal/en">European Parliament</a>.
<h2>Is it real or just political hype?</h2>
Although green hydrogen has gained more attention in recent years, high production costs and concerns over efficiency have hampered its scalability &ndash; especially in road transport. Currently, green hydrogen is quite expensive, as it requires a massive amount of renewable electricity for its production. Moreover, hydrogen fuel cell cars are less than&nbsp;<a href="https://earth.org/hydrogen-vs-electric-cars/">40% energy-efficient</a>&nbsp;while most battery-powered electric cars boast around&nbsp;<a href="https://earth.org/hydrogen-vs-electric-cars/">80% efficiency</a>.
Critics also point to the high environmental costs attached to green hydrogen and express discontent over what they see as misguided hydrogen hype. Many argue that green hydrogen is not sustainable, considering the high amount of water required for its production - around&nbsp;<a href="https://pubs.acs.org/doi/10.1021/acsenergylett.1c01375">9kg</a>&nbsp;of water per kilogram of hydrogen produced. &ldquo;In areas that are already water scarce, hydrogen production could threaten the water supply,&rdquo; expressed&nbsp;<a href="https://www.linkedin.com/in/jurg-grutter-4b197634/">Jurg Grutter</a>, CEO at&nbsp;<a href="http://www.transport-ghg.com/">Gr&uuml;tter Consulting AG</a>. In response to this,&nbsp;<a href="https://www.linkedin.com/in/thierry-poupeau-3280041/">Thierry Poupeau</a>, CEO of&nbsp;<a href="https://lafrenchtech.com/en/">Knowledge to Beyond Petroleum</a>, explained, &ldquo;The water challenge is resolvable. You can develop desalination plants to get a sufficient water supply that can also help provide water to places with water scarcity.&rdquo;
<a href="https://www.linkedin.com/in/clh-llc/">Christopher Headrick</a>, Founder &amp; Executive Chairman of&nbsp;<a href="https://h2eg.com/">H2 Energy Group</a>&nbsp;disagreed with the desalination solution and highlighted the importance of shifting away from electrolysis-centred solutions and realizing the true potential of high-yield pyrolysis method for efficient, low-cost and sustainable hydrogen production: &ldquo;There is a reason why desalination is still not a viable option &ndash; it&rsquo;s too expensive. Moreover, the fossil fuel market cannot be disrupted by an electrolysis-only solution. Electrolysis should not be seen as the only way of producing green hydrogen. High-yield fast pyrolysis is a sustainable alternative that uses renewable biomass to produce low-cost green hydrogen without putting a strain on water resources.&rdquo;
Given these challenges, the debate on green hydrogen has become quite polarized. One side argues that green hydrogen is being over-estimated as a one-size-fits-all solution while the other sees it as highly crucial to solve the net zero paradox.&nbsp;&ldquo;In transportation, particularly road transport, green hydrogen is more of a hype, than an environmentally friendly solution,&rdquo; said Grutter. Headrick, however, argued, &ldquo;There is no reason to believe that green hydrogen is just another spark. It will be critical for the energy transition in all sectors including road transport. However, what is important is that we shift to more sustainable, economic and circular methods of green hydrogen production.&rdquo;
<h2>What to expect next?</h2>
Moving forward, we need more research to improve the scalability of green hydrogen. Collaborative innovation platforms are necessary to strengthen research for developing efficient and sustainable hydrogen technologies. &ldquo;Carbon-neutral alternatives to fossil fuels remain a challenge, especially replacement of natural gas. Green hydrogen can become revolutionary for the energy sector; however, more research and technological innovation are needed to increase the efficiency of green hydrogen,&rdquo; explained&nbsp;<a href="https://www.linkedin.com/in/grant-allen-78b9615b/">Grant Allen</a>, energy expert and Professor at the&nbsp;<a href="https://www.manchester.ac.uk/">University of Manchester</a>.
Lastly, it is essential to remember that there are no easy wins regarding climate mitigation. Green hydrogen is a significant part of the climate solution but we need all possible low-carbon solutions on the table to meet our climate targets. While battery technology will be essential, hydrogen is viable in situations where batteries fail. Whether or not green hydrogen will become the game changer the world needs for decarbonizing the transport sector is still unclear. However, it is doubtlessly an important piece of the Net Zero puzzle.
<h3>References</h3>
Blasio, N. D. (2021). Sustainable Mobility: Renewable Hydrogen in the Transport Sector. Belfer Center for Science and International Affairs. <a href="https://www.belfercenter.org/publication/sustainable-mobility-renewable-hydrogen-transport-sector">https://www.belfercenter.org/publication/sustainable-mobility-renewable-hydrogen-transport-sector</a>​
Central, H. (2022). Members of The European Parliament Have Decided to Support a Hydrogen Based Green Transition in The Transport Sector [Hydrogen Central]. <a href="https://hydrogen-central.com/members-european-parliament-have-decided-support-hydrogen-based-green-transition-transport-sector/">https://hydrogen-central.com/members-european-parliament-have-decided-support-hydrogen-based-green-transition-transport-sector/</a>​
Chugh, A. (2021). What is green hydrogen and why do we need it? An expert explains. World Economic Forum. <a href="https://www.weforum.org/agenda/2021/12/what-is-green-hydrogen-expert-explains-benefits/">https://www.weforum.org/agenda/2021/12/what-is-green-hydrogen-expert-explains-benefits/</a>​
CORPORATIVA, I. (2022). Green hydrogen: An alternative that reduces emissions and cares for our planet. Iberdrola. <a href="https://www.iberdrola.com/sustainability/green-hydrogen">https://www.iberdrola.com/sustainability/green-hydrogen</a>​
Ertug, I. (2021). Green Hydrogen for a carbon neutral transport sector. The European Files. <a href="https://www.europeanfiles.eu/energy/green-hydrogen-for-a-carbon-neutral-transport-sector">https://www.europeanfiles.eu/energy/green-hydrogen-for-a-carbon-neutral-transport-sector</a>​
Fletcher, C. (2022). Hydrogen vs. Electric Cars: Comparing Innovative Sustainability. Earth.Org. <a href="https://earth.org/hydrogen-vs-electric-cars/">https://earth.org/hydrogen-vs-electric-cars/</a>​
Maritime shipping. (2022). International Council on Clean Transportation. <a href="https://theicct.org/sector/maritime-shipping/">https://theicct.org/sector/maritime-shipping/</a>​
Owen-Burge, C. (2022). Maritime sector and green hydrogen leaders agree on ambitious targets and collaboration to reach zero emissions global shipping by 2050. Climate Champions. <a href="https://climatechampions.unfccc.int/green-hydrogen-and-green-shipping/">https://climatechampions.unfccc.int/green-hydrogen-and-green-shipping/</a>​
Parkes, R. (2022). Timing is key | Green hydrogen could &ldquo;supply 32% of aviation energy demand by 2050&rdquo; | Recharge. Recharge | Latest Renewable Energy News. <a href="https://www.rechargenews.com/energy-transition/timing-is-key-green-hydrogen-could-supply-32-of-aviation-energy-demand-by-2050/2-1-1263675">https://www.rechargenews.com/energy-transition/timing-is-key-green-hydrogen-could-supply-32-of-aviation-energy-demand-by-2050/2-1-1263675</a>​
Radowitz, B. (2020). Blue skies: Airbus plans for hydrogen-powered passenger jet by 2035 | Recharge. Recharge | Latest Renewable Energy News. <a href="https://www.rechargenews.com/transition/blue-skies-airbus-plans-for-hydrogen-powered-passenger-jet-by-2035/2-1-878882">https://www.rechargenews.com/transition/blue-skies-airbus-plans-for-hydrogen-powered-passenger-jet-by-2035/2-1-878882</a>​
Volkswagenag. (2020). What is more efficient: E-battery or hydrogen? Volkswagenag. <a href="https://www.volkswagenag.com/en/news/stories/2020/03/battery-or-fuel-cell--that-is-the-question.html">https://www.volkswagenag.com/en/news/stories/2020/03/battery-or-fuel-cell--that-is-the-question.html</a>​
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

Fueling the future (II/III): can green hydrogen decarbonise the transport sector?

At the recent COP27, green hydrogen was at the top of the agenda with various governments announcing ambitious new multi-million dollar plans to build plants, collaborate and invest in developing a global market. As global leaders search for the right building blocks to lead us away from climate-impacting fossil fuel consumption to more sustainable alternatives, green hydrogen is being touted as one key solution.

So, what exactly is green hydrogen? And how might it best fit into the global energy transition?

At the recent COP27, green hydrogen was at the top of the agenda with various governments announcing ambitious new multi-million dollar plans to build plants, collaborate and invest in developing a global market. As global leaders search for the right building blocks to lead us away from climate-impacting fossil fuel consumption to more sustainable alternatives, green hydrogen is being touted as one key solution.
So, what exactly is green hydrogen? And how might it best fit into the global energy transition? Here at Broadpeak, we ask the experts we collaborate with and draw on our expertise to bring you what we know. This is the first in a trilogy of articles exploring this fascinating energy alternative &ndash; both its potential and challenges.
This is the first article of our green hydrogen trilogy.
<h2>A fuel alternative &ndash; but what is it best used for?</h2>
Green hydrogen is hydrogen that&rsquo;s produced from renewable energy, such as wind or solar power. An electric current is passed through water, separating out the hydrogen from the oxygen. In order for this process to be considered &ldquo;green&rdquo;, the electrical power must come from a renewable source.
Proponents of green hydrogen argue that it will allow for the greening of so-called &ldquo;hard-to-abate&rdquo; sectors such as construction and heavy-duty transportation which are responsible for approximately <a href="https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors">30%</a> of the world&rsquo;s annual carbon emissions. According to some <a href="https://www.forbes.com/sites/mikescott/2020/12/14/green-hydrogen-the-fuel-of-the-future-set-for-50-fold-expansion/?sh=2900ac7f6df3">estimates</a>, green hydrogen could supply up to 25% of the world&rsquo;s energy needs by 2050 and become a USD 10 trillion market by 2050. In sectors where decarbonisation is hard, or where electrification is next to impossible, green hydrogen could be a way forward in meeting global emission reduction targets. Green hydrogen has potential to be the fuel that helps meet the Net Zero target by 2050 in hard-to-abate sectors.
&ldquo;Green hydrogen is about an industrial transformation which offers solutions for the hard-to-electrify sectors and can have a strong impact on major industries,&rdquo; explains <a href="https://www.linkedin.com/in/almudena-nunez-42b6a3132/">Almudena Nunez</a>, Research Associate at <a href="https://www.linkedin.com/company/rifs-potsdam/">Research Institute for Sustainability</a> (formerly known as Institute for Advanced Sustainability Studies) in an interview with Broadpeak.
Another key area where green hydrogen could help meet climate goals is heavy-duty transportation such as aviation, trucking and shipping. Green hydrogen could potentially be used for decarbonizing heavy-duty vehicles like trucks that are harder to electrify. In addition, it could play a significant role in transitioning the aviation and shipping sectors. &ldquo;Green hydrogen has a clear business case in long-distance freight, aviation, shipping and heavy-duty road transport like trucks,&rdquo; said <a href="https://www.linkedin.com/in/jurg-grutter-4b197634/">Jurg Grutter</a>, Chief Executive Officer at <a href="https://slocat.net/1548-2/">Gr&uuml;tter Consulting AG</a>.
Given the numerous applications of green hydrogen, many international organizations, governments and businesses across the world have acknowledged it as a key pillar of a net-zero economy. The United Nations has recognized green hydrogen as an innovative solution to achieving carbon neutrality and other climate targets. <a href="https://www.weforum.org/agenda/2022/08/green-hydrogen-climate-change-energy/">Around 45 countries</a> are devising or have published national strategies, featuring green hydrogen as a critical enabler of the energy transition. According to a <a href="https://elperiodicodelaenergia.com/wp-content/uploads/2021/04/Hydrogen-Insights-2021.pdf">report</a> by the Hydrogen Council, by 2030, USD 300 billion will be invested in projects to develop green hydrogen as a clean source of energy.
<h2>The elephants in the room</h2>
Hydrogen is still a carbon-intensive technology as <a href="https://energypost.eu/hard-to-abate-sectors-need-hydrogen-but-only-4-is-green/">less than 4%</a> of global hydrogen production is derived from renewable energy (green hydrogen). Although hydrogen demand reached an estimated <a href="https://blogs.worldbank.org/ppps/green-hydrogen-key-investment-energy-transition">87 million</a> metric tons in 2020, over 95% of it was sourced from carbon-emitting fossil fuels (i.e. grey hydrogen). Green hydrogen, produced through the electrolysis process using renewable energy, is compatible with sustainable and climate-safe energy use. Therefore, we need to scale up green hydrogen while cutting down grey hydrogen production.
Moreover, the current method of green hydrogen production is not that energy efficient as it always comes with significant energy loss. About <a href="https://www.weforum.org/agenda/2021/08/hydrogen-carbon-intensive-energy-solution/">20-40%</a>of energy is lost when green hydrogen is produced using electrolyzers while additional energy is lost in the transportation of hydrogen. This means that 100 kWh of renewable energy usually produces only between 60-80 kWh of hydrogen energy. Clearly, more research is needed to develop innovative solutions that can make green hydrogen production methods more efficient and sustainable.
Furthermore, a clear use case is missing for green hydrogen and the price is not competitive for it to achieve scale. A clear use case for green hydrogen is still being debated while the current pricing mechanisms are not competitive with alternative fuels. Energy Transition Expert, <a href="https://www.linkedin.com/in/matthewsebonia/">Matthew Sebonia</a>, Director and Founder of <a href="https://www.linkedin.com/company/global-climate-capital/">Global Climate Capital</a>, told Broadpeak:
&ldquo;We cannot make absolute statements about the revolutionary ability of green hydrogen yet as our understanding of its best use case from an economic and service to customer point&nbsp;of view is still lacking. For example, is it like the transition from whale oil to kerosene, wood to coal or coal to electricity (all three of which added massive end-user service value) or is it just a much more modest minor new product/service or at its worst case a flop like cellulosic ethanol and autonomous driving (thus far)?&rdquo;
<h2>Incentives and policy to open up a way forward</h2>
For a green hydrogen economy to become a reality, effective regulatory frameworks are needed to drive investment and ensure a just energy transition. Governments need to create policy frameworks that incentivize investments and promote a just and sustainable energy transition. According to <a href="https://www.linkedin.com/in/almudena-nunez-42b6a3132/">Almudena Nunez</a> &ldquo;First and foremost, energy transition needs to be just, meaning that all sustainability concerns must be considered holistically. Also, more stringent policy frameworks need to be developed that are understandable for the investors to promote a green hydrogen economy.&rdquo;
Moreover, economic incentives are crucial for ramping up the green hydrogen market. A whole range of instruments like subsidies, carbon pricing and minimum quota for sustainable fuels is fundamental to scaling green hydrogen. &ldquo;Climate projects with innovative technologies like green hydrogen are financed by KfW, on behalf of BMZ, in developing and emerging countries with a mixture of grants and concessional loans with long maturities. This can mobilize private capital, which is necessary to achieve broad market penetration&rdquo;, said <a href="https://www.linkedin.com/in/florian-ziegler-66332b201/">Florian Ziegler</a>, Principal Portfolio Manager at <a href="https://www.linkedin.com/company/kfw/">KfW Development Bank</a>, in an interview with Broadpeak.
Lastly, we need to scale up research and development to understand the best use case for green hydrogen. More investments are needed on the research side to improve the efficiency and scalability of green hydrogen. Matthew stated, &ldquo;Green hydrogen is being touted as a one size fits all solution which is not right. In the climate energy transition, there are no silver bullets, only silver buckshot. Our understanding of the best use case for green hydrogen is still lacking. We need more clear deployment and market cases for customers to understand the true potential of green hydrogen for the energy transition.&rdquo;
<h3>References</h3>
<h5>Bianco, E. (2022). What&rsquo;s stopping the world from using more green hydrogen? World Economic Forum.<a href="https://www.weforum.org/agenda/2022/08/green-hydrogen-climate-change-energy/">https://www.weforum.org/agenda/2022/08/green-hydrogen-climate-change-energy/</a>​</h5>
<h5>Council, H. (2021). Hydrogen Insights A perspective on hydrogen investment, market development and cost competitiveness. McKinsey &amp; Company. <a href="https://elperiodicodelaenergia.com/wp-content/uploads/2021/04/Hydrogen-Insights-2021.pdf">https://elperiodicodelaenergia.com/wp-content/uploads/2021/04/Hydrogen-Insights-2021.pdf</a>​</h5>
<h5>Kane, M. K. (2022). Green Hydrogen: A key investment for the energy transition. <a href="https://blogs.worldbank.org/ppps/green-hydrogen-key-investment-energy-transition">https://blogs.worldbank.org/ppps/green-hydrogen-key-investment-energy-transition</a>​</h5>
<h5>Molloy, P. (2019). &ldquo;Hard-to-abate&rdquo; sectors need Hydrogen. But only 4% is &ldquo;green.&rdquo; Energy Post. <a href="https://energypost.eu/hard-to-abate-sectors-need-hydrogen-but-only-4-is-green/">https://energypost.eu/hard-to-abate-sectors-need-hydrogen-but-only-4-is-green/</a>​</h5>
<h5>Nault, K. (2022). Clean Hydrogen: A long-awaited solution for hard-to-abate sectors. <a href="https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors">https://seas.harvard.edu/news/2022/10/clean-hydrogen-long-awaited-solution-hard-abate-sectors</a>​</h5>
<h5>Scott, M. (2020). Green Hydrogen, The Fuel Of The Future, Set For 50-Fold Expansion. Forbes.<a href="https://www.forbes.com/sites/mikescott/2020/12/14/green-hydrogen-the-fuel-of-the-future-set-for-50-fold-expansion/">https://www.forbes.com/sites/mikescott/2020/12/14/green-hydrogen-the-fuel-of-the-future-set-for-50-fold-expansion/</a>​</h5>
<h5>Walman, F. (2021). Why hydrogen will remain a carbon-intensive solution until we can produce it cleanly. World Economic Forum.<a href="https://www.weforum.org/agenda/2021/08/hydrogen-carbon-intensive-energy-solution/">https://www.weforum.org/agenda/2021/08/hydrogen-carbon-intensive-energy-solution/</a>​</h5>
illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability &amp; Energy writers, their opinions do not necessarily represent those of illuminem.

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Fatima Farooq Murawat

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