COVID-19 Recovery Programmes and PtX in Transport

Power to X (PtX) based on green hydrogen (H2) is one important route to advance the transformation towards a sustainable, climate-neutral energy system. In particular in the „hard-to-abate“-sectors of the economy, such as steel, cement or chemicals production, as well as in aviation and maritime transport, electrification is currently not a viable option. Neither ships nor aeroplanes will be able to cross the Atlantic or the Pacific Ocean with batteries alone.

Here, PtX is the solution.

Converting green electrons into green molecules, wind and sun into sustainable fossil-free fuels and feedstocks (S4F), will help to achieve climate neutrality. The first step is to convert renewable energies into “green” hydrogen. Subsequently, hydrogen can further be processed into gaseous, liquid, or solid commodities for industry and transport. All these processes are technologically well known and tested. Yet, production costs are still high. By investing in PtX demonstration and pilot plants learning curves and innovation leaps could be facilitated resulting in efficiency gains and cost reductions for H2 and PtX production. Further up-scaling can be achieved either by increasing plant size (scaling by size) or by multiplying the number of small plants produced in series (scaling by number).

Recovery programmes must be green

The Coronavirus SARS-CoV-2 has plunged the world into a deep crisis. If in reaction to the economic collapse triggered by COVID-19, unprecedented financial support packages are being put together, they should not obstruct the transformation pathways towards sustainable development and a fossil-free future. The Sustainable Development Goals (SDGs), agreed in the UN Agenda 2030, and the objectives of the Paris Agreement on Climate Change must show the way for the COVID-19 crisis response programmes. If the financial firepower of our economies is exhausted with short-sighted COVID-19 rescue packages, there will be no more means left for the fight against CO2.

All the new programmes must therefore contribute simultaneously to driving economic recovery and to mitigating climate change. The SDGs and climate goals must become the benchmarks for assessing support policies, programmes and projects. Over the last few weeks, the travel ban boosted video conferencing. In a similar way recovery programmes now being prepared should boost investments in green hydrogen and PtX.

Boosting demand is key for creating sustainable markets

If on the supply side stimulus packages would trigger investments in PtX production, markets must also escalate on the demand side. Promotion measures can be purchase guarantees, blending mandates or public procurement. For example, airlines have committed to limit their carbon footprint. This will in part be achieved through improvements in energy efficiency of new aircrafts. However, the main reduction in CO2 emissions will have to come from switching to fossil-free sustainable aviation fuels (SAF). Since the quantities of sustainable biofuels are limited, the only long-term option is synthetic e-kerosene from PtX processes. If now, because of the COVID-19 shut down, airlines ask for state aid or partial and even full nationalisation, it should be clear that any support must be conditional on a commitment to take major steps towards reducing the carbon footprint of the airline. Clear jet-fuel targets should be set for using synthetic e-kerosene from PtX.

Mutual interest in international cooperation

Green H2 and PtX can offer huge opportunities for emerging economies and developing countries, both for their domestic market as well as for exports. Germany and Europe will continue to be energy importers in this field as well. Due to the limited natural potential they will, for a long time, not be able to secure the required quantities of hydrogen-based energy by domestic production alone. Germany and Europe will have to rely on international cooperation. They must help partner countries in ramping-up their production capacities and developing functioning markets.

With the International Climate Initiative (IKI), Germany has been supporting developing countries and emerging economies in the implementation of ambitious climate protection strategies for more than ten years. With increased funding for PtX partnerships, Germany and Europe could not only contribute to climate protection and sustainable development globally. They would also strengthen their security of supply and foreign trade relations in the longer term.

The PtX Hub will monitor H2/PtX in recovery programmes

The newly established International PtX Hub Berlin aims at building international PtX networks bringing together experts and actors engaged in advancing green hydrogen and PtX solutions on a global scale. Such partnerships are joint efforts for achieving global climate protection and sustainability goals. The PtX Hub will review market developments on a global scale, yet with special attention to emerging and developing countries. Regarding Corona stimulus packages the PtX Hub will monitor national and international support programmes and will review to what extent they contribute to a just energy transition by supporting green hydrogen and PtX projects. Are they turning wind and solar energy potentials into local value added for domestic needs? Are they establishing resilient value chains and reliable trade channels for climate-neutral PtX products?

Sharing this knowledge will contribute to mutual learning and will facilitate co-operation. Like this, the acute COVID-19 health crisis could become a wake-up call for tackling not just PtX and energy transition, but also other global challenges such as food security and migration, biodiversity and climate protection, in a joint co-operative manner.

Photo by Priscilla Du Preez on Unsplash
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