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This weekly report covers all aspects of the major changes facing industry, from climate change initiatives through ESG investing, and includes regular work on recycling, renewables, energy transition and hydrogen, and carbon capture and use.  It is included as part of our comprehensive research/consulting subscription, but can also be purchased separately. 

  

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Hydrogen – The Endgame, But The DoE Ambition Could Hurt

Unrealistic hydrogen cost targets concern us, as the benefit of spurring R&D investment may be more than offset by waiting for something unachievable.
Hydrogen is a key “endgame” need for climate action, but the DoE targets appear much more realistic for 2040-2045 (and possibly later) than 2030.
Biofuels are a “plug-and-play” solution that works today – the sector is likely undervalued, in our view, but this market is not absent sizable challenges.
Our research also discusses whether chemical recycling can be good enough for all stakeholders – unintended consequences may hurt current polymer makers.
The SPAC craze is far from over – some of the ESG ones will work but not all.

Carbon Games – Appetite, But Not Enough Hunger Yet

Climate abatement is the key to net-zero goals – it is not the same thing as eliminating fossil fuels. This report discusses this common misconception.
Carbon use initiatives are emerging – all are worth exploring, but combined, they will likely only be a tiny part of the overall needed abatement.
We discuss more repercussions in the oil sector and potential price inflation.
Recycling growth rates may not impact overall plastic demand, but the volume of recycled polymer available to the end-use market may affect demand.
LNG continues to sit on the leading edge of carbon capture, even if plans are not yet fully formed.

Big Oil’s Big Problem – Hard To Find A Favorable Scenario

Big oil is in trouble, and it is a challenge to find a compelling reason to invest in this market currently – we view industry consolidation as inevitable.
IEA sees fossil fuel spend rising in 2021 – we agree, but see cuts before 2025.
We think some of the current hype surrounding recycling is price-driven. In our view, some announced growth plans will be uneconomic when prices normalize.
Other recycling initiatives continue – many are focused on needed technology.
Domestic inflation and infrastructure are risks to US offshore wind ambitions.

Waiting For New Tech Elevates Net-Zero Target Risks/Challenges

Governments should support proven emission initiatives that work today rather than overly fund unproven technology advances that might fail or underperform.
The clean energy trade is not over. Another rally looks likely – focus on Gevo.
Evidence of consumer product companies seeking renewable materials for packaging & ingredients is rising – a headwind for conventional chemicals/plastics.
Hydrogen may outbid power suppliers for wind and solar – bad for grid security.
Critics of the IEA net-zero plan should come with alternatives, not just a “no”!

Land Of Confusion: Absent Policy Alignments, We’re Doomed!

COP26 meeting will be critical in getting alignment based on practical options.
IEA issues a roadmap to 2050 but fails to consider materials inflation adequately.
The IEA view deems the Biden 2030 emission targets as unlikely even with CCS.
More debate on plastic recycling – packagers increasingly consider alternatives.
Resistance to CCS may delay 2030 goals – LNG appears as the likely US pioneers.