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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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Was COP27 a “Trade Fair for Natural Gas”? If So, Not So Bad

COP27 was the ideal opportunity for the natural gas lobby to make its case, and while the purists are objecting – those focused on energy security cannot resist.

Gas oxy-combustion with CCS should see a boost as users look for baseload alternative to wind, solar and nuclear – hydro needs a low-cost breakthrough.

Labor remains a major bottleneck for energy transition as old energy jobs are still growing and not providing the labor pool for new energy – training is needed.

2023 is a critical possible tipping point for ESG investing, especially in the US – regulators need to step up to improve the image – but be impeded in the US.

Otherwise, we look at opportunities for chemical recycling and waste to energy, and more consolidation in RNG.

Capital Costs are Driving Investments Rather Than Operating Costs

The number of inefficient projects relying on free power or large incentives to drive acceptable projected returns is rising. Operating costs will matter long term!

The hope of free electric power is behind many decisions, but power demand estimates keep rising, suggesting that free power is decades away in large volume.

More and more analyses and opinions are emerging around limiting reliance on China for batteries, but battery materials and components also need attention.

Recycling is having a bad quarter as virgin polymer prices fall in the West – many projects risk financial challenges as costs are fixed, and margins are collapsing.

We also look at the first large DAC project on the Gulf Coast, some more forecasts for ammonia demand, and many substantial looming ESG goals.

Comfortably Numb: The COP27 Discussion Is Easier Than The Need

While COP27 has been characterized by platitudes and agreements in principle, there is a lot more focus on how much money needs to be spent than on who pays.

Estimates of spending needs are varied, and poorly defined by “where needed”, but the numbers are very large and relentless – year after year – through 2050.

Well-defined incentives are likely the only way to get things done, but getting global agreement on incentives will be hard, as will compensating poorer nations.

Meanwhile, water is pushing its way into the front row – more concerns over supply and more need for action – we still like the investment space very much.

Otherwise, we take on a couple of recycling issues, oxy-combustion, other overly stretched power options, coal, and biofuels.

It’s All Happening in Egypt, But Will Progress Become Entombed

The public alignment at COP27 likely masks country concerns around how to manage both climate goals and current energy, food, and inflation issues.

 Accelerating energy transition is likely to make something already expensive more so: we use hydrogen as an illustration – suggesting that low costs are far off.

We are concerned that growth spending will stop – for new plant and equipment and R&D, as environmental compliance consumes more cash and legal costs rise.

We note that fertilizers and lithium are the bright spots for investors today, but other critical metals seem to have bottomed – EV demand is a significant driver.

Otherwise, we look at declining recycled polymer prices, oxy-combustion, methane emissions, DAC, US coal-based power, and ESG investing’s demise!

Is Recycling A “Waste” Of Time? No, Because We Have No Choice.

Another very damning report from Greenpeace on the lack of progress in recycling uses data selectively and out of context and draws the wrong conclusions.
That said, the lack of measurable progress in the US and the negative impact of banning plastic waste exports on US recycling rates are trends worth monitoring.
These reports are mostly filled with criticism and rarely suggest any reasonable solution, though they flag “design for recycling” needs that we have covered.
The polymer industry has its work cut out to turn this story around – but we argue a lot of progress has occurred, even if it is not impacting volumes much yet.
Otherwise, we look at climate finance, CO2 incentives, not enough focus on alternates to wind and solar (a little self-serving), and all benefitting from the IRA.

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