As COP29 Ends Divided – Europe Needs a New Lower Cost Strategy – Will That Appear in 2025?

Key Points

The lack of cohesion coming out of the recent COP29 meeting makes it very hard for any one country or region to pursue what may be unilateral strategies to address a challenge that is global rather than regional.
If Europe continues to pour public money into increasingly more expensive strategies while the rest of the world does not, local European governments will not survive their next election cycle. Change is needed in 2025.
Those looking to move green or blue hydrogen to Europe to exploit lower power or natural gas costs will pay a lot to make ammonia, ship ammonia, and then crack ammonia, costs will still be lower than Europe green costs.
Last-minute DOE funding targets more marginal projects and companies, in our view, trying to allocate funds in the hope that the new administration will not pull them back: bad projects should not get taxpayer money.
Meanwhile we see more headlines around collaboration with companies joining forces to minimize pain and perhaps increase the chance of project/technology success – this will likely be a theme of 2025.

Exhibit 1: Europe’s alternatives – none looks that attractive.