European and US debt is at an all-time high. Developing nations are struggling to feed their people and bring them basic healthcare provisions. The costs of war and plans for rising defence expenditure are eating into national budgets. Governments borrowing huge sums of money to pay for a Net Zero future is simply unrealistic. We must re-think the decarbonisation investment paradigm. It is not the ‘greenest’ projects that will get large-scale investment, only the ‘best’ projects will be bankable. What does ‘best’ mean? To the bank, it means a clear business case with an acceptably low level of risk.
Given the pace of green hydrogen deployment is likely to be slower than most targets or projections from the past five years have laid out, scarce green hydrogen molecules should be put to their best possible use – in the context of the alternative pathways to Net Zero.
For example, when ammonia is made from hydrogen via steam methane reforming of natural gas, CO2 leaving the reformer MUST be removed to enable the catalytic Haber Bosch ammonia synthesis reaction to take place. Every natural gas-fed ammonia plant on this planet already has a CO2 capture facility. The CAPEX is spent and the energy costs for CO2 capture are committed. This CO2 must be sequestered to reduce the CO2 intensity of this ammonia. I therefore would not prioritise green hydrogen for ammonia production until we have decarbonised existing ammonia plants massively.
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