An introduction to decarbonisation
Global demand to cut carbon emissions
The energy mix is shifting, driven by environmental concerns and technological advances. Action is required now to curb global warming and achieve climate stability this century. The global energy sector needs to change. Our reliance on fossil fuels must reduce to improve long-term energy security, economic prosperity and climate resilience.
To meet net-zero carbon emissions, our dependence on coal, oil and gas must drop significantly. Hydrogen is integral to global climate goals, helping to decarbonise long-distance and heavy-duty transport, for which ICEs and BEVs are unsuitable, and energy-intensive industries, such as steel and concrete, where fossil fuels are too polluting.
Sustainability and ESG mandates are forcing companies to decarbonise. Decarbonisation is now legally binding and specific. The worldwide aim is to limit global warming to not more than 1.5°C above pre-industrial levels, but human-induced warming reached the 1°C mark around 2017. Hitting the 1.5°C mark will require the world to cut greenhouse gas emissions by 30 gigatonnes (GT) annually by 2030. Industries are committing to lower CO2 greenhouse gas emissions and harness intermittent renewable energy. Six main sectors need to cut their greenhouse gas emissions: energy, industry, transport, agriculture and food, forests and land use, and urban districts.
The energy sector needs to cut greenhouse gas emissions by 12.5 GT per year. It is no longer necessary to wait for new inventions but simply transition to renewable energy (and use energy more efficiently). Decarbonisation can be achieved using hydrogen with energy-efficient power and high-quality heat, especially if hydrogen is generated from renewable sources. Cutting carbon emissions from the fuel mix for transport, industry, buildings and power will be vital.
The industry is required to reduce emissions by more 7 GT per year by using renewable-energy-based systems and improving energy efficiency.
The transition to carbon-free fuels and zero-emission vehicles will take decades, not years. Transport is responsible for ~25% of all greenhouse gas emissions, and this is set to double by 2050, but emissions can be reduced by 4.7 GT by using a range of electrified technologies (batteries, fuel cells) and potentially synthetic fuels.
Greenhouse gas (GHG) emissions due to human activity have been the dominant cause of observed global warming since the mid-20th century. Continued GHG emissions may cause long-lasting changes around the world, increasing the likelihood of severe, pervasive and irreversible effects for populations and ecosystems.
A rapid scale-up of electrolysis and carbon capture, utilisation and storage (CCUS) is required to help meet sustainability goals. To meet the Intergovernmental Panel on Climate Change (IPCC) 2015 Paris Agreement’s goal of limiting global climate change to under 2ºC, signed at COP21, the Sustainable Development Scenario estimates roughly 496 mt of clean hydrogen (renewable electrolysis and fossil fuels with CCUS) will need to be brought online by 2070. Concurrently, a decreasing percentage share of fossil-based production without CCUS will also be required.
With 95% of global hydrogen production made from hydrocarbons today, there is an enormous addressable market for the adoption of PEM water electrolysers to produce hydrogen using water and renewable energy. Unfortunately, several key decarbonisation challenges exist, such as:
How can we store renewable energy efficiently to achieve a stable power supply?
Transportation of energy - how can we store energy in a way that facilitates global trade?
Which low-carbon sources will provide adequate, large-scale grid buffering?
Difficulties in electrifying sectors such as heavy-duty transport and industry where rechargeable batteries are not sufficient.
Industrial and chemical processes which release CO2 and are difficult to mitigate.
Hydrogen and ESG consulting solutions
Explore SFA (Oxford)'s available hydrogen and sustainability services for clients.
SFA works with value chain players to navigate green hydrogen opportunities, energy solutions, market risks and emerging zero-carbon technologies.
SFA identifies investment and commercial opportunities for players across the hydrogen value chain, and where green hydrogen can be best utilised for investment.
SFA evaluates electrolyser and competing technology economics, growth opportunities and market risks for PGM based-technologies and thrifting.
SFA provides long-term precious metal supply security outlooks for platinum, iridium and ruthenium using detailed modelling of mine supply and recycling.
With SFA’s Hydrogen Mobility Watch, we can help you track the development of hydrogen fuel cell initiatives and infrastructure development projects underway.
SFA is closely following the green hydrogen water electrolyser and mobility players and projects underway across the industry, and national strategy developments.
SFA is developing its capabilities to benchmark individual green hydrogen projects to assess the long-term viability of industrial players becoming more competitive.
SFA assesses the main international legal frameworks for green hydrogen development, penalties and incentives, implications and end-use sector opportunities.
SFA is a trusted advisor to the Boards and senior management of major stakeholders and provides regular assistance to hydrogen strategy and planning efforts.
North America has an ambitious hydrogen roadmap, leveraging decades of scientific and engineering developments, particularly in California.
Europe is home to some of the most innovative technologies, ambitious decarbonisation targets and national strategies, and strongest value chain networks.
China’s latest five-year plan to develop the hydrogen industry sets out the major tasks for industry groups and targets for hydrogen fuel cell vehicles on the road.
The Middle East has vast solar and wind capacity to help enable green hydrogen production, in addition to its established role in the oil and petrochemicals economy.
Japanese companies continue to be pioneers in developing hydrogen and fuel cell technologies, as the country seeks to strengthen its energy security.
Southern Africa produces most of the world’s critical metals for the hydrogen economy and has the potential to generate significant renewable energy for export.
Latin America has a strong position in renewables for power generation, and an international consortium is developing green hydrogen production in Chile.
Australia and New Zealand are developing projects in the hydrogen supply chain, many of which are in collaboration with other significant regional players.
SFA works closely with value chain players to understand how materially significant ESG issues can be integrated into their wider company strategy.
SFA's benchmarking of PGM and Battery Raw Material producers on critical ESG factors generates high-resolution insights for sustainability-conscious investors.
SFA's analysis of environmental footprints from recycled material in terms of GHGs, waste generation and processing is helping future PGM recycling investments.
SFA supports investors finance new projects and opportunities through analysing clean energy investment targets and portfolios to reach their sustainability goals.
SFA assists clients in capital-intensive industries to optimise assets and energy processes to reduce their environmental footprint to achieve higher returns.
With the energy transition well underway, SFA helps energy-intensive industries with energy storage assessments to reduce their reliance on the grid.
SFA delivers detailed insights into climate change policies and sustainability targets to support industry stakeholders sustainability targets and market impacts.
SFA provides institutional investors and industrial players with sustainability and energy insights to enhance their pathway to net-zero strategies.
SFA executes scenario analysis to evaluate the impact of ESG development and clean energy to meet sustainability goals and optimise investment returns.
SFA supports mobility companies with their strategies providing global or local industry context, benchmarking competitors and identifying new opportunities.
SFA can help you analyse the rise of electric vehicle charging, grid development and clean energy to enhance your sustainable transport and air pollution strategies.
SFA evaluates mine-to-market carbon reduction opportunities for producers to OEMs by tracking product carbon footprints and process emissions.
SFA can help you unlock a green carbon price premium and identify new opportunities by assisting your transition away from high emissions-intensive processes.
The SFA team has completed many labour workforce projects analysing demographic trends and forecasting future labour requirements.
SFA’s regional industry ESG assessments analyse and peer-review your competitors to help discover the environmental leaders, and sector underperformers to measure future value opportunities.
SFA can help industrial clients accelerate investments into low carbon energy sources with in-depth research into carbon trading systems and credit mechanisms to help offset and reduce their carbon emissions.
SFA's insights of CCUS evaluates opportunities and technology risks for circular-economy players seeking to optimise their clean energy transition and long-term sustainability goals.
SFA is tracking the decarbonisation and energy transition of the PGM value chain assessing the environmental and emissions footprint along the journey to net-zero.
Our ESG monitoring of the lithium market is critical to the long-term sustainability of battery electric vehicles for investors and stakeholders.