BlackRock, the world’s largest investment firm, has indicated that those that don’t tackle climate change will lose money in 5 years. Some financial institutions have made multi-trillion commitments from now to 2030 to invest in the green economy while still focusing the majority of investments in fossil fuels. Canadian banks are among the global top fossil fuel investors.
Reliable standards for environmentally sound investments do not exist and very few Canadian clean tech firms are listed on a stock exchange. Too often, Canadian clean tech firms must go outside Canada for financial support and/or to enter the stock market. This article presents solutions for investors and clean tech companies alike, but these solutions require government action.
Methane emissions are underrated at one third of global warming gases, largely because fossil fuel sector methane emissions are underestimated by 70 percent. Current data indicates the energy sector accounts for 40 percent of man-made methane. Consequently, the COP26 non-binding pledges of over 100 nations for a 30 percent reduction by 2030 are not only dreadfully inadequate, but also, without standardized measuring, reporting and verification standards, oil and gas industry methane greenwashing is rampant. The draft European Union (EU) plan to reduce methane emissions up to 80 percent by 2030 and establish transparent extraterritorial norms will be complimented by an accelerated transition to clean energy independence to reduce reliance on Russia. As well, existing technologies can capture fossil fuel methane for selling it for a net profit, meaning methane zero-tolerance is possible. By contrast, Canada’s methane ambitions procrastinate and are fuzzy.
Canada’s 2030 Emissions Reduction Plan (ERP) was made public March 29, 2022. Since the country’s oil and gas sector with methane included, plus transportation components, together, represent about half of Canadian emissions, one would have thought these sectors would be objects of strong climate initiatives. Yet, for these sectors, the ERP appears to be the product of accommodation of industry lobbies. The action items stupendously lack integrity and are weak. As such, the ERP like all previous government emission reduction targets, will not achieve its goals.
The environmental footprint of an electric vehicle represents a sectorial industrial revolution, including the first lifecycle end of an EV battery. With existing technologies, 95% of an EV battery can be recycled for inclusion in a new EV battery and/or energy storage. The remaining 5% can be handled by third party recyclers. Because the price of mined lithium is rising exponentially, recycled EV battery materials are set to compete with mined content. The result is massive investments underway and planned for EV recycling, especially in China and Europe. The U.S federal government is supporting EV battery recycling and there is a nascent industry in Canada. But there remains a colossal challenge for the Canadian national and provincial governments to assure Canada is a major player alongside China and Europe.
Green hydrogen, produced with electrolysers to separate hydrogen from water, uses clean energy as a power source. Green hydrogen will not be with cost competitive with grey hydrogen for some time, perhaps not until 2030. Grey hydrogen, derived from steam reformation of natural gas, represents 98 percent of global hydrogen consumption, and is primarily used for industrial processes. To replace grey hydrogen with green hydrogen would require a doubling of global electricity generation with primarily solar and wind sources, pre-empting the use of renewables for electrical power. This would necessitate more use of natural gas for power production. And there are extraordinary inefficiencies and technological challenges for green hydrogen, while there is no shortage of affordable and efficient clean technologies alternatives. Nevertheless, US$30 billion has been committed to-date for green hydrogen through government stimulus packages. Is green hydrogen a fossil fuel industry trojan horse for gas derived hydrogen and the use of gas for electrical power?