Batteries and hydrogen have emerged as two promising technologies for enabling this next level of economy-wide deep decarbonization, as they both allow low-cost renewable electricity to be stored and used to reduce or eliminate emissions in applications ranging from cars and trucks to steel and cement production. Realizing this potential at sufficient speed to reach ambitious emissions goals calls for a holistic approach that simultaneously encompasses the development and deployment of technologies on the supply side as well as the scaling up of demand pull from key end-use sectors. For both batteries and hydrogen, this will require not only whole-of-government policy coordination but also increased levels of international cooperation and public-private collaboration.

Progress in reducing costs and scaling up deployment of wind and solar power technologies over the past decade offers hope; in 2020, over 80 percent of all new electricity capacity installed worldwide was renewable, surpassing 2019’s record-breaking additions by 50 percent. However, these intermittent generation resources are not sufficient on their own to provide 24/7 zero-emission electricity – and the electricity sector itself accounts for just a quarter of global emissions , leaving major emitting sectors such as transportation and industry (a combined 35 percent of emissions) still in need of solutions.

The ruling by the German court, largely hailed by climate activists and younger generations, gives the government until the end of 2022 to specify binding targets beyond 2030. It gives teeth to the Paris Agreement and sends a strong signal to other governments to get serious. However, the scale and scope of the challenge of fully decarbonizing the global economy is daunting, particularly in the face of growing energy needs for developing countries.

On April 29, Germany’s Federal Constitutional Court ruled the country’s climate law unconstitutional because it placed too great an onus on future generations through post-2030 emissions reductions. Indeed, achieving net-zero carbon dioxide (CO2) emissions by 2050 has been deemed essential to limiting the increase in global average temperatures to 1.5°C or less by 2100, but governments and other decisionmakers are not on track to reach that target. Some 70 percent of today’s CO2 emissions belong to countries with net-zero commitments, but tangible policy action to those ends continues to fall short. Even if all current commitments were implemented and met on schedule, the world would still be on a trajectory to see global temperatures rise by 2.1°C by 2100—an unacceptable and costly outcome.

Global Investments in Battery Inputs Ramping Up Recent announcements of alternative cobalt and lithium supply investments Jan 2021 United Kingdom Investment: $5.4 million In Cornwall, Cornish Lithium announced direct lithium extraction trials in UK coastal waters. Hover over box and scroll for more developments Mar 2021 Western Australia Investment: $66 million In Darwin, Core Lithium began production at the first Australian lithium mine outside Western Australia. Hover over box and scroll for more developments Mar 2021 Australia Investment: $304 million In Adelaide, Cobalt Blue Holdings is de-risking a major cobalt project by securing groundwater allocation to comply with water management regulations. Hover over box and scroll for more developments May 2020 United States Investment: California awarded $7.46 million, EnergySource raising $350 million The California Energy Commission awarded grants to Berkshire Hathaway Energy and Controlled Thermal Resources’ (CTR) Hell’s Kitchen Geothermal LLC for geothermal lithium projects in the Salton Sea. Hover over box and scroll for more developments Sep 2020 United States Investment: Unknown Tesla announced acquisition of land to pursue lithium mining in Nevada. Hover over box and scroll for more developments Feb 2021 Germany Investment: $2.1 billion Joint Vulcan Energy/DuPont pilot plant announced for geothermal direct lithium extraction in Germany’s Upper Rhine Valley. Hover over box and scroll for more developments Feb 2021 Chile Investment: $400 million Pilot direct lithium extraction project developed in San Pedro de Atacama, Chile. Hover over box and scroll for more developments Apr 2021 Canada Investment: $2.9 billion DeepGreen Metals went public, raising capital in order to pursue deep-sea cobalt mining. Hover over box and scroll for more developments Aug 2020 Japan Investment: $330 million Japan’s Jogmec successfully excavated cobalt from Japan’s coastal waters. Hover over box and scroll for more developments

A truck crosses the flooded Uyuni Salt Flat in Bolivia, site of a future lithium mine, on July 10, 2019. PABLO COZZAGLIO/AFP VIA GETTY IMAGES

Hydrogen an Increasing Focus for Heavy-Duty Applications Recent announcements for hydrogen use in the steel and shipping sectors May 2021 United States Investment: Unknown Port of Corpus Christi signed an MOU with Ares Management for green hydrogen production for use in industry and shipping. Hover over box and scroll for more developments Feb 2021 Sweden Investment: $3.04 billion An H2GreenSteel project was launched in Sweden, co-founded by Northvolt co-founder. Hover over box and scroll for more developments Mar 2021 Japan Investment: $92 million Course50 green steel project is advancing, backed by Nippon Steel and Japanese government. Hover over box and scroll for more developments Mar 2021 China Investment: $15 million HBIS, JFE Steel, and China Baowu signed MOUs with BHP to explore hydrogen-based steel in China. Hover over box and scroll for more developments Feb 2021 Denmark Investment: Unknown In Esbjerg, Denmark, Maersk, Copenhagen Infrastructure Partners, consortium announce plans for Danish green ammonia facility. Hover over box and scroll for more developments May 2021 The Netherlands Investment: $1.2 billion The Port of Rotterdam, Thyssenkrupp, and HKM announced a partnership to study green steel. Hover over box and scroll for more developments May 2021 Australia Investment: $78 million Austral funded green hydrogen projects, including ammonia production at fertilizer facility. Hover over box and scroll for more developments Mar 2021 Saudi Arabia/South Korea Investment: $720 million Hyundai Heavy Industries signed deal with Saudi Aramco for blue hydrogen and ammonia projects. Hover over box and scroll for more developments Feb 2021 Chile Investment: Unknown Austria Energy Group, Oekowind, and Trama signed an MOU for a green ammonia project in Chile. Hover over box and scroll for more developments

Salzgitter AG, a steel manufacturer in Germany seen in July 2020, is slowly replacing coal used in its production process with hydrogen and electricity from renewable sources. HILAL ÖZCAN/PICTURE ALLIANCE VIA GETTY IMAGES

At the same time that hydrogen’s role in decarbonizing hard-to-abate sectors is becoming clearer, costs of producing clean hydrogen via low-emission or zero-emission pathways are falling. There are two production pathways for hydrogen of greatest interest in the energy transition, one using electricity as a feedstock and one using natural gas. Along the electricity pathway, “green” hydrogen is produced via electrolysis (splitting water with electricity) powered by renewable electricity, while hydrogen produced with nuclear power is variously called “yellow,” “purple,” or “pink.” In the natural gas pathway, “blue” hydrogen is produced by steam methane reforming (SMR) of natural gas (or renewable gas), with the carbon dioxide emissions from the process captured and sequestered; the less-developed “turquoise” hydrogen pathway is an intriguing variation, producing hydrogen from natural gas via pyrolysis and thus generating no carbon dioxide emissions to sequester (only solid carbon). Each production pathway has its own advantages and disadvantages, and a given country or region’s hydrogen strategy will be determined significantly by its resource base. Those making the largest push for investments in green hydrogen production include China, Europe (particularly Germany, the Netherlands, and Portugal), Australia, Chile, and Morocco, with India expected to unveil a green hydrogen strategy soon. By contrast, the greatest interest in blue and turquoise hydrogen will be in countries with low-cost gas supplies, such as the United States and countries in the Middle East, including Saudi Arabia and the United Arab Emirates, that are increasingly recognizing the potential of blue hydrogen to become a lucrative export market to replace oil exports in a decarbonized world. Green hydrogen is currently two to three times more expensive than blue hydrogen, although it can be cost-competitive in countries with extremely low electricity prices. Renewable electricity costs are expected to continue falling over the next decade, however, and electrolyzer costs could come down by 40 percent through 2030 with aggressive scaling up of the industry, making green hydrogen cheaper than blue in a growing number of regions by the end of the decade. Similarly, BNEF projects that blue hydrogen will have an edge until 2030, after which green will have a cost advantage in most markets based on steadily falling prices for power and electrolyzers as they scale. Each pathway will see costs from $1.5–$2.5/kg, less than a third of today’s costs and within the $2/kg range targeted for unsubsidized competitiveness with “grey” hydrogen (hydrogen produced from SMR of natural gas without carbon capture). Countries Will Compete on Cost to Capture Future Hydrogen Market Share 2050 forecast for “green” versus “blue” hydrogen costs in real 2020 U.S. dollars per kilogram Source: Energy Transitions Commission Despite its near-term cost advantage, blue hydrogen suffers from a major disadvantage, compared to its green cousin: it is not a true zero-emission solution. First of all, existing carbon capture and sequestration (CCS) technologies only capture about 85 to 95 percent of carbon dioxide from a plant, which places a fundamental limit on the role of CCS and blue hydrogen in a net-zero economy. Perhaps equally problematic is the issue of leakage of methane, the main component of natural gas and itself a greenhouse gas, from the natural gas supply chain. This persistent issue plagues natural gas infrastructure from wellhead to end uses, undercutting the credibility of natural gas as a “bridge fuel” and threatening support for blue hydrogen.

Methane Stands to Dog Long-Term Prospects for Blue Hydrogen + Methane’s impact as a greenhouse gas is short-lived but potent, with an impact 84 times that of hydrogen over 20 years but “only” 28 times that of CO2 over a 100-year time frame. The recent Global Methane Assessment from the UN Environment Programme and the Climate & Clean Air Coalition of the UN Framework Convention on Climate Change demands greater attention to the issue of methane leakage, noting that actions to cut methane emissions by 45 percent by 2030 could reduce warming by 0.3 degrees Celsius by 2050. Moreover, 60 percent of these actions have low mitigation costs, particularly leak-remediation activities in the oil and gas industry, which can often have a negative cost because of extra revenues from keeping gas in the system. The oil and gas industry itself has shown increasing interest in controlling these emissions, working primarily through industry organizations such as the Oil and Gas Climate Initiative and the recently launched Net-Zero Producers Forum of major producing countries. The task is not trivial; natural gas is invisible and can escape from small leaks anywhere in the supply chain, and current best practices involve surveying thousands of production sites and networks of pipelines with cameras carried by drones, trucks, or people. However, new methane-monitoring satellites launching in the next several years, including the MethaneSAT initiative led by the Environmental Defense Fund launching in 2022 and the CarbonMapper joint project of NASA, the California Air Resources Board, Planet, and other partners launching in 2023, could accelerate progress dramatically. By helping companies as well as regulators detect leaks quickly, satellite-based monitoring could help reduce remediation costs, ratchet up regulations, and improve global monitoring efforts. Hover over box and scroll for more developments