The Canadian targets highlighted below are ambitious and will likely not happen without the significant CCS projects planned for Alberta. The CCS opportunity will drive down energy and chemical (heavy industry) based emissions meaningfully and could also be the basis for new power generation capacity to allow the transport industry reductions that the country is looking for – either through EVs or hydrogen-based transport.
Source: Government of Canada, NGI, March 2022
We also note the BASF Henkel collaboration on the use of renewable inputs and suspect that we will see many more of these types of collaborations. Henkel is likely a large customer of BASF’s as well as a competitor in select areas and the announcement reflects the challenges with net-zero ambitions, especially in Germany, and the possible benefits of working together - pooled resources, R&D, etc.
Source: BASF – Sustainability, March 2022
More on power prices in today's daily report, showing the falling pricing as renewable capacity increases and what that means at the margin on days when renewable generation is high and demand normal to low. The green hydrogen clan is banking on these periods of low power costs to make hydrogen at what could essentially be zero variable cost. But they have competition from batteries that could store the free power to release it later at periods of higher demand. However, when you look at the lower marginal prices and then also look at the higher materials costs in the Exhibit 1 of the daily report, you can see why renewable power companies are showing very poor margins today and why projects are being delayed.
