The increased frequency and severity of adverse weather events witnessed in 2024 is underscoring to businesses and governments alike the urgent need for change and a rapid transition toward net zero.
At the forefront of industry efforts to decarbonise are a range of technologies promising to reduce emissions for businesses in various ways.
Speaking to Energy Monitor ahead of the Climate Tech: Understand the Technologies you Need to Deliver Net Zero webinar on 26 September, GlobalData senior analyst Christopher Papadopoullos discussed ‘hyped’ technologies, the state of adoption and disruptive companies in the climate technology industry.
In 2024, what are currently the most ‘hyped’ climate technologies?
In terms of where there is hype but also uncertainty, there is a lot of hype around hydrogen as it has so many use cases. Because of its chemical properties, it can be used to reduce emissions from steel, chemicals, heavy transport like shipping, aviation and long-distance trucking, which are all large sources of global emissions. The big challenge is to also reduce emissions from its production, which is energy intensive.
Sustainable aviation fuel, which can be made from hydrogen, gets a lot of hype, because it is really the only solution for the aviation sector. If it cannot be scaled, aviation will struggle to find an alternative solution for cutting emissions. There are small electric planes, but for large planes the batteries would be too heavy.
Direct air capture, a form of carbon capture, is receiving a lot of attention from companies and investors. And then there is artificial intelligence, which is hyped more broadly, but is receiving hype for its ability to optimise complex systems and generate efficiencies.
Which climate technologies have the ability to scale quick enough to reach net zero goals?
Many companies have short-term goals to reduce emissions, usually set for 2030, and long-term goals, where they typically aiming for net zero by 2050. For 2030 goals, expect to see a lot of investment in renewables, especially solar, which can be installed on site. And electric vehicles, which are not just for the automotive sector, but any company with logistics or onsite vehicles such as agriculture and mining. Then there are batteries, which we need to store energy from intermittent renewables and to power electric vehicles.
Companies will also look at cheaper ways to improve efficiency without big new investments in capital equipment. This means they will look to enhance their tracking of emissions and energy use with a view to working out how to improve the efficiency of their operations. This can include a range of technologies like the internet of things, artificial intelligence, satellites, drones, robotics and digital twins. These technologies allow companies to track and reduce emissions.
Between 2030 and 2050, we would hope that technologies like green hydrogen, direct air capture, small modular nuclear reactors and methane inhibitors for livestock will scale enough to allow companies to hit their 2050 targets.
In the last five years, what companies have been the most disruptive in the climate tech startup space?
There are few exciting nuclear startups. Companies like Newcleo, Xcimer and X-energy are developing small modular reactors and, in some cases, have already made deals with companies to supply SMRs. So, this technology is very real, and corporate orders have already come in, though in most cases not in time to hit 2030 targets.
A company called H2 Green Steel perhaps does not match the typical image of a startup, because it’s trying to launch a massive industrial operation, but its new and raising money. It wants to build an all-in-one green hydrogen and steel plant that can produce low carbon steel. Steel production is a major global source of greenhouse gases. It has raised Microsoft, which would need steel to reduce emissions from construction of its data centres.
Climeworks and 1PointFive are exciting companies that are trying to scale carbon removal through direct air capture, where carbon is removed straight from the atmosphere. They already have operating plants and have sold carbon offsets to a number of large corporate buyers.
What are the current levels of climate tech adoption? What sort of companies are leading in integrating climate tech?
The main adopters so far are heavy emitting industries like energy, automotive and industrial sectors like mining. These are sectors with high emissions and need to invest in climate tech, both using it and producing it, to future proof their business. They are buying, producing, and using renewables, electric vehicles, batteries and other forms of energy storage. Tech companies have all been big investors, the tech giants like Microsoft and Amazon have their own climate-focussed venture funds that support climate tech startups and have invested heavily in producing accurate emissions data.
Many companies from all sectors have started investing in monitoring technologies as emissions reporting is made mandatory in more places. Many large companies across all sectors have started investing in climate tech to some extent. Many companies will have onsite renewables like solar, will be replacing their vehicle fleets with electric vehicles, or will be using heat pumps to create heat for their buildings or manufacturing processes, so there is a broader adoption starting to take place.
Which climate tech solutions are likely to meet tough regulatory requirements as safety standards evolve?
It would probably be easier to focus on those that might have difficulty meeting safety and regulatory requirements. I think there would be three. One would be hydrogen, which is very difficult to store safely, whether in a large storage facility, in pipelines, or vehicles. Nuclear SMRs are promising, and, although they can fit on the back of the lorry, I cannot image many people would want to work too near to one. Regulators would probably feel the same way. Methane inhibitors are given to cattle to reduce the methane they produce. They are in the early stages, but I imagine they might be required to meet various stages of approval, and would consumers be cautious of that produce at first? Potentially.
The Climate Tech: Understand the Technologies you Need to Deliver Net Zero webinar on the 26 September will explore which climate technologies can scale in time to hit climate targets, what companies are pioneering the industry, which climate startups are disrupting the industry and more.
“Q&A: the climate tech industry and net zero” was originally created and published by Energy Monitor, a GlobalData owned brand.
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