We are going to focus our Sunday Thematic this week (will be found here) on a couple of related topics: alternative technologies that only make sense when prices are high, and whether this has changed with ESG and climate pressure, and ESG solution fixation – “methanol is the only solution” – see infographic below – or it’s hydrogen or ammonia or batteries. Sticking with the theme that seems to have hit a chord with COP26 attendees and something that we discussed in a report around carbon capture several months ago – we cannot let a foolhardy quest for “perfect” get in the way of more economic “good enough” solutions. The emission issues are generally site and process specific and different solutions will be more practical and affordable for different processes and in different geographies – there is no “one size fits all” solution.
Source: Methanol Infographic – Methanol As A Hydrogen Carrier, Methanol Institute, November 2021
In many of the post COP26 headlines, we are getting a sense that a more practical carbon abatement mindset is emerging – with increased emphasis on carbon capture both because it is something that can happen relatively quickly and because the technology exists today, even if the cost may come down because of the typical learning curve and scale opportunities. There is a lot of discussion around carbon pricing and trying to get to some global standards and one of the headlines below raises one of the key debates, which is whether you generate a carbon credit when you sequester CO2. If you are sequestering CO2 that needs to be removed to lower the carbon cost or footprint of an emitter – can you also sell a credit – or is that double counting? One of the reasons why the financial community is so focused on the “auditability” of carbon credits is because they see this as a vital tool to drag private money into the climate change world. For more see our ESG and Climate work here.