China's steel price continues to slide

 The weakness is steel shows that the Chinese economy hasn't yet turned up.

The steady slide in China's steel price

 Another pointer to the slowdown in China.

Plunging China steel price points to recession

For the last 30 years, every time there's been a recession in China, the government has turbocharged property to get the economy moving.  Which means that the steel price has risen during recoveries.  So far this year, the price has just kept on sliding.  The property market is deep in the doldrums, and ongoing covid lockdowns keep on stopping local economies dead.  A falling Chinese steel price points towards deepening recession.

Reducing your personal emissions

The big sources of CO2 emissions: electricity generation (±30%); land transport (±20%), agriculture & land clearing(±25%, but agriculture much worse than that because of methane); iron and steel (±7%); cement (±8%).   These are global totals; your country's might differ.  Canada, e.g., has plenty of hydro.

So, to reduce your personal emissions by at least 50%:

1. Become vegetarian
2. Buy your electricity from a genuine green supplier, not one that uses offsets to 'reduce' their emissions, which are mostly (alas) scams
3. Replace your car with an EV, but if that's too expensive, a simple old hybrid still reduces emissions (urban driving) by 40-50% and costs only $2 K more than a petrol car
4. Put solar panels on your roof if you can
5. Use trains instead of planes to travel long distance

and ... 

Vote for a party with a real emissions policy, as opposed to parties which are just greenwashing, which will :

1. Push steel companies to produce steel using green hydrogen/methane. 
2. Subsidise EVs and electric buses/trains
3. Eliminate fossil fuel subsidies
4. Introduce a price on carbon
5. Tax imports from countries which don't cut emissions.

The only emissions which will be very hard to reduce will be from cement.  But there are ways around that too.

 

Source: BBC
Note that only the CO2 emissions saved by a vegan diet in this chart are given.
Methane (a greenhouse gas 80 times as potent as CO2) is excluded.

Iron ore & steel prices falling

Iron ore and steel prices falling, consistent with a slowdown or even recession in China.  Much of China's growth has come in recent years from property development.  That's ground to a halt.  See Not So Grande for a piece on the collapse of Evergrande and its effect on the Chinese economy.

 

China steel price plunges

 A quarter of China's domestic steel demand comes from construction.  The government's crackdown on borrowing (Evergrande and others) plus tumbling home sales is clearly slowing the property sector.   As in other economies, property is a leading indicator of the growth of the overall economy.  Expect Chinese growth to slow further over the next few months.

Iron ore recovers; coal languishes

Because China consumes so much of the world's production of iron ore, when the iron ore price starts to rise, it's usually a sign that the Chinese economy is accelerating.  China is definitely recovering, but it's very likely that GDP is still below the pre-covid crash peak. 

China is also the world's largest consumer of coal.  And its price is not recovering, reflecting the very different fundamentals.  The world and China will go on demanding more and more iron ore and steel.  But demand for coal has prob'ly peaked, as US and European power utilities switch to renewables and gas.  It will likely peak this year or next in China too, as the costs of new-build renewables there fall below the wholesale cost of electricity.

Pollution makes Covid much worse

Dense smog in Milan.
The heavily polluted northern Italian city and the surrounding region have been hard hit by the coronavirus outbreak.
Photograph: Flavio Lo Scalzo/Reuters

There are three new reports linking air pollution with higher death rates from the coronavirus.

The first, from Climate News Network:

In research which could, if confirmed by further studies, have fundamental implications not only for health but also for the climate crisis, scientists at the University of Cambridge say they have found an association between living in parts of England with high levels of air pollution and Covid-19 severity.

Because of the urgent need to share information relating to the pandemic, the researchers say, they have decided to publish their report on medRxiv, the preprint server for health sciences, even though it has not yet been peer-reviewed. However, they say, this preliminary data is supported by that from other countries.

The initial symptoms of Covid-19 include fever, but do not always include breathing difficulties. But, the researchers point out, some patients do go on to develop very serious respiratory problems. Although most experience only mild illness, around a quarter of patients admitted to hospital need intensive care treatment because of viral pneumonia with respiratory complications.

Research suggests that this probably stems from an overactive immune response, they say − but it is not clear why some patients are at greater risk of severe disease.

Previous studies have suggested that people over the age of 60 or with underlying health conditions, including cardiovascular disease, diabetes, chronic respiratory disease and cancer, are at highest risk of severe disease or death.

Long-term exposure to air pollutants, including nitrogen oxides and ground-level ozone from car exhaust fumes or burning fossil fuels is a known risk factor for these health conditions.

Such pollutants can also cause a persistent inflammatory response and increase the risk of infection by viruses that target the respiratory tract.

[Read more here]

The other two are from The Guardian.

High levels of air pollution may be “one of the most important contributors” to deaths from Covid-19, according to research.

The analysis shows that of the coronavirus deaths across 66 administrative regions in Italy, Spain, France and Germany, 78% of them occurred in just five regions, and these were the most polluted.

The research examined levels of nitrogen dioxide, a pollutant produced mostly by diesel vehicles, and weather conditions that can prevent dirty air from dispersing away from a city. Many studies have linked NO2 exposure to health damage, and particularly lung disease, which could make people more likely to die if they contract Covid-19.

“The results indicate that long-term exposure to this pollutant may be one of the most important contributors to fatality caused by the Covid-19 virus in these regions and maybe across the whole world,” said Yaron Ogen, at Martin Luther University Halle-Wittenberg in Germany, who conducted the research. “Poisoning our environment means poisoning our own body, and when it experiences chronic respiratory stress its ability to defend itself from infections is limited.”

[Read more here]


And, coronavirus detected on particles of air pollution.

Coronavirus has been detected on particles of air pollution by scientists investigating whether this could enable it to be carried over longer distances and increase the number of people infected.

The work is preliminary and it is not yet known if the virus remains viable on pollution particles and in sufficient quantity to cause disease.

The Italian scientists used standard techniques to collect outdoor air pollution samples at one urban and one industrial site in Bergamo province and identified a gene highly specific to Covid-19 in multiple samples. The detection was confirmed by blind testing at an independent laboratory.

Previous studies have shown that air pollution particles do harbour microbes and that pollution is likely to have carried the viruses causing bird flu, measles and foot-and-mouth disease over considerable distances.

The potential role of air pollution particles is linked to the broader question of how the coronavirus is transmitted. Large virus-laden droplets from infected people’s coughs and sneezes fall to the ground within a metre or two. But much smaller droplets, less than 5 microns in diameter, can remain in the air for minutes to hours and travel further.

[Read more here]

What can we do about air pollution?  It's easy to think we have to wait for batteries to fall in cost so that we can use them to "firm" electricity generation and facilitate the switch to EVs.  Actually, batteries are falling in cost very fast.   Yet it is possible to cut emissions from electricity generation by 80%, even without using batteries, though batteries help, by providing overcapacity in renewables in a continent-wide grid with backup from gas-fired peaker plants.  I discuss this fully here.  Renewables are much cheaper than coal, so we'd actually save money. Plus, if we banned all cars without an electric motor, even if they are not full EVs, but hybrids (HEVs) or plug-in hybrids (PHEVs), we could cut emissions from transport by 50% to 80%.   And with steel, we can also reduce emissions by using green hydrogen or green methane instead of coking coal.

If we wanted to, we could cut the worst air pollution (from petrol/diesel engines) by 25% over the next five years, and 50% over the next 10, just by banning the sale of new cars without electric engines.  Car prices would rise by only $1500-$2000.  The average car lasts 10 years,  but the switch could be accelerated by  a "cash for clunkers" program.  Plug in hybrids (PHEVs) cost around $5000 more than petrol cars, but they cut emissions and pollution by 80%.   A tax incentive of $2000 per car will make HEVs as cheap as petrol cars, and PHEVs only $3000 more expensive.  Since petrol consumption will be much reduced, these higher costs will be offset by reduced fuel charges.  Actually, we can cut emissions by even more, because in 10 years' time, batteries will cost 10% of what they do now, and PHEVs and full EVs will be concomitantly cheaper.

The question is, do we really want to cut air pollution?  Or are we going to go on listening to the urgent entreaties of legacy car makers who have dragged their feet in this transition?  Are we going to force a shift in electricity generation away from coal, or are we going to continue to phiff and phaff?  Are we going to introduce a carbon tax to encourage iron and steel and cement producers to reduce emissions?

It's up to us.  There are no technological and only small cost impediments to us doing these things.  Only politics and corruption stop us.

New steel technology threatens coal

ThyssenKrupp tests hydrogen in pig iron production

From IEEFA:

German manufacturing giant Thyssenkrupp has completed a successful, first-of-its-kind demonstration of running a steel furnace completely on hydrogen, a development that is likely to further dent the future prospects for the global coal industry.

The company successfully demonstrated the ability for hydrogen to be used to fuel a steel blast furnace, and Thyssenkrupp sees the achievement as the first step towards transitioning the manufacturing industry towards zero-emissions steel production. The use of hydrogen to fuel the blast furnaces in steel production also provides a pathway for using renewable hydrogen, potentially eliminating the dependence of the industry on coal.

“Today is a groundbreaking day for the steel industry,” chairman of Thyssenkrupp Steel Europe Premal Desai told Renew Economy in an interview in Sydney. “We are doing pioneering work here. The use of hydrogen is the key lever for climate-neutral steel production. Today’s test is another step in the transformation of our production, which will culminate in green steel.

As part of the demonstration conducted in its ‘furnace 9’, Thyssenkrupp fed hydrogen into one of 28 tuyeres, or nozzles, that otherwise supply coal into the blast furnace. Following the successful trial, Thyssenkrupp plans to scale up the injection to all 28 tuyeres within the furnace and aims to eventually run at least three furnaces completely on hydrogen by 2023.

Thyssenkrupp is one of the world’s largest steel producers and produces around 12 million tonnes of crude steel annually. The company has committed to achieving a 30 per cent reduction in the company’s emissions by 2030. The company is also aiming to become carbon neutral by 2050.

It’s a huge development in the use of zero-emissions and renewable energy supplies in the manufacture of industrial products like steel and presents a major threat to the coal industry. In conventional blast furnaces around 300 kilograms of coking coal and 200 kilograms of pulverised coal are used in the production of a tonne of pig iron.

Zero carbon by 2050

If we want to stop catastrophic climate change and global heating, we need to cut emissions of CO2 and methane to zero by 2050.  Let's split those 30 years up into decades, aiming to cut emissions by 1/3rd of the 2019 level each decade.

2020-2030

This will be the decade where we have to close down as many coal power stations as we can.  The good news is that in most countries, wind or solar or both are now cheaper than (new) coal.  In developed countries, most coal power stations are old, and will soon have to be retired.  When they are, they will be replaced by wind and solar.  Even with 10 hours of storage, wind and solar are the cheapest power source in the USA, except for existing coal power stations which have been fully depreciated and have had their debt paid off.  But of course, they are precisely the power stations which will need to be retired over the next decade.

Even in China, where coal is cheap, large-scale solar will this year reach grid parity, meaning it can compete with the wholesale price of electricity, which is determined by China's massive coal fleet.  China produces 35% or world CO2 emissions, and is the largest consumer of coal.   A change here will be very important for world emissions and the global climate.

So the target is that by 2030, the number of coal power stations still operating will be small.  They'll simply be too costly to keep going.  This is much faster then even the relatively optimistic BNEF forecasts (they forecast just 25% from renewables by 2030).  Nevertheless, the cost curves as well as the increasing global panic about catastrophic climate change suggest this will be likely.

During this decade, we should also try to switch heating from gas/oil to electric, and we will start the switch to electric transport.  Of which more below.   Electricity and heat production contributes 25% of global CO2 emissions, so we'll need to find more areas to cut emissions by 1/3rd by 2030.

2030-2040

This will be the decade where we electrify transport.  Battery costs are falling by 20% compound per annum.  This means that we should cross the $100/kWh battery pack cost line by 2023, which will mean that the "sticker price" of EVs will be comparable to ICEVs.  Already, in China and India (where it is very important that the growth in demand for personal transport isn't satisfied by petrol cars) small, cheap EVs are available.   Once again, the twin pincers of public anxiety about climate change and the plunging cost of EVs will rapidly squeeze fossil fuels out of the market. Assuming EVs reach 100% of new car sales by 2030, then by 2040, almost all the emissions from road transport will have stopped, assuming a 10 year vehicle life, which is lower than what it is now, but government will likely want to accelerate the transition by banning polluting cars and lorries from town centres as well as buying back aging fossil fuel clunkers.

In developed countries, these emissions are about 1/3rd of total emissions.  In developing countries, they make up a smaller proportion on average, though the percentages vary widely.  But demand for cars is growing fast in developing countries, so a transition to EVs will prevent big rises in emissions from this sector.

It will also be the decade when we make cement production and iron & steel carbon-neutral.  We have the technologies to do this now, but these processes are still more expensive than making them the old way.  Expect carbon taxes or regulations, to force a shift.

Battery technology may well have advanced far enough that we will be able to fly long distance without using jetfuel.  Or we will have shifted to carbon-friendly jetfuel.  Or we'll be flying long distance by SpaceX's suborbital shuttle, fuelled by green methane, and short distance by electric planes.  Once again, carbon taxes will help shift air travel towards zero-carbon alternatives. 

Emissions from transport and industry (iron & steel, cement, chemicals, mostly) make up another third of global emissions.  By 2040, these will have stopped.  They'll have to.  Together with what will have been done in the 2020s, total emissions will have fallen by roughly 2/3rds, a compound rate of decline of 5.5% per annum.

2015.  Source: EPA

2040-2050

By 2040, emissions from electricity generation, transport, and industry will have fallen dramatically.  But there will remain some emissions, by far the most important being agriculture, land-use, land-clearing, etc.  There's no particular reason to wait until 2040 to deal with these.  We could start transitioning now.  After all, we have alternatives to meat.  And perhaps by 2030 or so, most ppl will be terrified enough of climate change to change their personal lifestyles.  But change here will be hard.  With electricity generation, the future is already happening now.  Renewables are simply cheaper.   With EVs that will soon be the case.  But with meat, we're asking people to change life-long habits.  It'll have to be done, it's just that politicians will postpone action as long as they can get away with it.  Once again, a carbon tax would help the shift.   If you think that the outrage generated by trying to get our economy to switch to green electricity was over the top, wait till you tell people they must eat less meat.  Yet, I have hope.  Synthetic meats are taking off.  Vegetarianism and veganism are rising trends.   And if meat substitutes taste just like the real thing but don't inflict dreadful cruelty on animals and have a huge negative effect on the environment, then why not?

2020-2050

In each decade, the necessary year-on-year percentage decline will increase, even though as a percent of the starting point, the decadal declines will be roughly the same.   If we cut emissions 1/3rd by 2030, then we have to cut emissions by 1/2 from 2030 to 2040.  And from 2040 to 2050 by 100%.  These seem to be large percentages, but they will only look like that because of previous successes.

Many of the shifts will begin before the decade I've selected for each of them, though I expect my selected decade will be when they reach their culmination.  If the transitions are sped up, maybe we can reach near-zero emissions by 2040, if we move in all sectors.  And if we start massive re-afforestation we might achieve negative emissions, and will for the first time in the last 200 years see falling atmospheric concentrations of greenhouse gases.  We must surely hope so.

Iron and steel without fossil fuels

In electricity generation, renewables are these days much cheaper than coal, and heading towards parity with gas.  For example, in 2009 Lazard calculated that new solar cost 3.2 times new coal.  Now, that ratio is reversed.  New coal costs 3 times new solar.  Battery costs are plunging, by 15 to 20% per annum, which means it's getting cheaper and cheaper to "firm" renewables, so that large percentages of renewables can be introduced to the grid without affecting its stability.

At the same time, the falling cost of batteries mean that electric vehicles (EVs) will soon (2022-2024) reach sticker price parity with petrol/diesel cars.   By 2030, it will be technically and economically feasible to have 80 or 90% green electricity and a 50% (or more) electric vehicle fleet.  The Republicans and their oil-soaked billionaire friends will do their best to stop this trend, but it will be irresistible to most of the world.  Why use something that's filthy and polluting and kills millions globally when the alternatives are cheaper, cleaner, and carbon free?

But that still leaves the remaining sectors which produce CO₂, like iron and steel, cement, air travel and agriculture.

Of these, the iron and steel sector is making all the right moves (though it still has a long way to go)

First, steel made using green hydrogen (from en-former):

The EU is taking climate protection very seriously. Both increasingly stricter environment and climate protection regulations and rising costs through emissions trading are turning up the heat for the industry. By 2030, greenhouse gas emissions in the European Union are to be reduced by at least 40 percent compared the corresponding levels from 1990. By 2050, they are to be cut by as much as 80 to 95 percent.

This affects the steel industry in particular, given that it is considered to be one of the main industrial sources of the climate-damaging gas carbon dioxide. As a result, European steel producing companies are trying to fundamentally change their manufacturing processes through a number of pilot projects and test facilities in order to reduce these unwanted emissions.

The joint endeavours of a project of three Swedish companies, the steel group SSAB, the mining group LKAB and the energy group Vattenfall, are already coming along swimmingly. ‘Hybrit’, short for ‘Hydrogen Breakthrough Ironmaking Technology’, is set to produce zero carbon steel from 2020 onwards. At a plant in Luleå in northern Sweden, the conventional production method is being given a dramatic facelift.

The production of pig iron, which is later made into crude steel, uses iron ore as a basic material together with what is referred to as a reducing agent, which removes oxygen from the iron ore. Traditional pig iron manufacturing processes usually use coke as a reducing agent. However, in doing so carbon and oxygen produce the climate-damaging gas carbon dioxide.

The new production process uses hydrogen instead of coke, which also reacts with the oxygen in the iron ore, but the result is water vapour rather than carbon dioxide. The hydrogen itself is produced climate-neutrally with electricity from renewables. As such, the process could ultimately produce genuinely ‘green steel’.

Initially, Hybrit will only produce a comparatively modest amount of one metric ton of steel per hour. Moving forward, however, production is to be expanded to churn out the usual industrial quantities of around 100 to 200 times this figure. According to the feasibility study, the associated costs are currently still 20 to 30 percent higher than those of the traditional process, mainly because hydrogen production is complex and energy-intensive. 

[Wind costs are falling by 5% per annum, and solar by 10-15%, so that 30% cost premium will disappear within 5 to 6 years; plus the cost of carbon is only going to rise from her on out]

Difference between conventional steelmaking and the new Hybrit process: The Hybrit process uses hydrogen instead of coke, which produces no CO2 but only water (Source: Hybrit). 

Second, steel made using wind (E&E News):

For decades, access to cheap coal-fired electricity fueled industrial expansion across the Midwest, from auto plants to steel mills.

These days, a cleaner and cheaper energy source — winds blowing across the central Plains — is enabling new manufacturing investments, key sources of jobs and taxes for states hungry to grow their economies.

The latest example? A $250 million Nucor Corp. "micro" mill taking shape in Sedalia, Mo., that will be the first U.S. steel production plant that will run on wind energy.

The Sedalia mill's significance stretches beyond the state and represents the potential for greening the steel industry, which globally is a major source of carbon emissions, environmental advocates say. A report last year from the group Mighty Earth — "Cold Steel, Hot Climate" — noted that steel represented 7% of global carbon emissions worldwide in 2013, much of that from less efficient blast furnaces.

The plant is also indicative of what Midwest utilities and clean energy advocates alike see as new potential for economic expansion in the Heartland. While Appalachia has cheap shale gas driving big new investments, the Great Plains has an unlimited supply of even cleaner cheap wind.

The contract between Nucor and Kansas City-based utility Evergy Inc., which will bring new wind capacity online to supply the plant, is part of a broader national trend of corporate renewable energy purchases to achieve sustainability goals.

Nucor will be Evergy's largest Missouri customer when the plant begins operation. And the wind farm that will supply the plant, which has yet to be announced, will offset 100% of the mill's electricity supply.

The Sedalia mill will still rely on fossil from the regional Southwest Power Pool bulk power grid when it can't draw enough energy from wind on Evergy's system. Even then, the plant will be supplied at least partly by renewables as the power supply in SPP increasingly becomes greener (Energywire, Nov. 6).

In neighboring Iowa, wind energy has helped attract some of the biggest names in technology, including Google LLC, Facebook Inc. and Microsoft Corp. In Kansas, access to carbon-free wind energy was a key in the state landing a Mars Inc. plant.

[In this case, they are using scrap steel, not iron ore.  But the point is that wind costs have fallen so much that this steel-making method is now cost effective compared with traditional scrap steel operations, which use gas.  And gas is cheaper in the US than elsewhere.]

Third, steel made using the sun (CNN Business):

A secretive startup backed by Bill Gates has achieved a solar breakthrough aimed at saving the planet.

Heliogen, a clean energy company that emerged from stealth mode on Tuesday, said it has discovered a way to use artificial intelligence and a field of mirrors to reflect so much sunlight that it generates extreme heat above 1,000 degrees Celsius.

Essentially, Heliogen created a solar oven — one capable of reaching temperatures that are roughly a quarter of what you'd find on the surface of the sun.

The breakthrough means that, for the first time, concentrated solar energy can be used to create the extreme heat required to make cement, steel, glass and other industrial processes. In other words, carbon-free sunlight can replace fossil fuels in a heavy carbon-emitting corner of the economy that has been untouched by the clean energy revolution.

"We are rolling out technology that can beat the price of fossil fuels and also not make the CO2 emissions," Bill Gross, Heliogen's founder and CEO, told CNN Business. "And that's really the holy grail."

Heliogen, which is also backed by billionaire Los Angeles Times owner Patrick Soon-Shiong, believes the patented technology will be able to dramatically reduce greenhouse gas emissions from industry. Cement, for example, accounts for 7% of global CO2 emissions, according to the International Energy Agency.

Unlike traditional solar power, which uses rooftop panels to capture the energy from the sun, Heliogen is improving on what's known as concentrated solar power. This technology, which uses mirrors to reflect the sun to a single point, is not new.

Concentrated solar has been used in the past to produce electricity and, in some limited fashion, to create heat for industry. It's even used in Oman to provide the power needed to drill for oil.The problem is that in the past concentrated solar couldn't get temperatures hot enough to make cement and steel.

"You've ended up with technologies that can't really deliver super-heated systems," said Olav Junttila, a partner at Greentech Capital Advisors, a clean energy investment bank that has advised concentrated solar companies in the past.

That means renewable energy has not yet disrupted industrial processes such as cement and steelmaking. And that's a problem because the world has an insatiable appetite for those materials. Cement, for instance, is used to make the concrete required to build homes, hospitals and schools. These industries are responsible for more than a fifth of global emissions, according to the EPA.

That's why the potential of Los Angeles-based Heliogen attracted investment from Gates, the Microsoft (MSFT) co-founder who recently surpassed Amazon (AMZN) CEO Jeff Bezos as the world's richest person.

"I'm pleased to have been an early backer of Bill Gross's novel solar concentration technology," Gates said in a statement. "Its capacity to achieve the high temperatures required for these processes is a promising development in the quest to one day replace fossil fuel."

Heliogen uses computer vision software, automatic edge detection and other sophisticated technology to train a field of mirrors to reflect solar beams to one single spot.

"If you take a thousand mirrors and have them align exactly to a single point, you can achieve extremely, extremely high temperatures," Gross said, who added that Heliogen made its breakthrough on the first day it turned its plant on.

Heliogen said it is generating so much heat that its technology could eventually be used to create clean hydrogen at scale. That carbon-free hydrogen could then be turned into a fuel for trucks and airplanes.

Heliogen's biggest challenge will be convincing industrial companies using fossil fuels to make the investment required to switch over. Gross said the company has been talking to potential customers privately and plans to soon announce its first customers.

"If we go to a cement company and say we'll give you green heat, no CO2, but we'll also save you money, then it becomes a no-brainer," said Gross.

Its biggest selling point is the fact that, unlike fossil fuels like coal, oil and natural gas, sunlight is free. And Heliogen argues its technology is already economical against fossil fuels because of its reliance on AI.

"The only way to compete is to be extremely clever in how you use your materials. And by using software, we're able to do that," Gross said.

"If you can make hydrogen that's green, that's a gamechanger," said Gross. "Long term, we want to be the green hydrogen company."

[Even without fossil fuels, cement production involves cooking limestone to force the release of CO₂, so using CSP instead of fossil fuels won't completely cut its emissions.  But it's a big step in the right direction.]

Heliogen, backed by Bill Gates, has achieved a breakthrough that could allow cement makers to transition away from fossil fuels. The company uses artifical intelligence and an array of mirrors to create vast amounts of heat, essentially harnessing the power of the sun.

How electric vehicles tackle the climate crisis

There have been the usual articles funded by fossil fuels spruikers that EVs don't reduce emissions compared to petrol/diesel cars.  Only trouble is, they do.  CarbonBrief has done a longish article about it, which if you have time you should read.  I'm putting just this chart up, because it's so revealing.

One can see that in all cases "pure"  ICEVs produce more emissions over their lifecycle than EVs.  However, the carbon cost of manufacturing is roughly the same for all cars (more for bigger, obviously).  That will only change when we start producing iron and steel using green methane/hydrogen.  If we compare the non-battery manufacturing emissions over a car's lifecycle, the ratio of emissions by EVs compared to ICEV's is much lower.  In France the non-manufacturing emissions of the Nissan Leaf compared to the non-manufacturing emissions of an average Euro petrol/diesel car are 80% lower--because most of France's electricity comes from nuclear power.  Even in Germany, where a lot of electricity is generated by massively polluting brown coal (lignite) power stations, the non-manufacturing emissions by EVs compared to ICEVs is 30% lower.  As more and more electricity is generated by renewables, these ratios will fall further.  But no matter how green the grid gets, petrol cars will always produce 212 grams of CO2 per kilometre.

Moral of the story: EVs produce fewer greenhouse gasses and will produce fewer still when batteries and steel are made using green electricity and methane.

Battery costs dropping faster than expected

Wind, solar and storage.
Source: Forbes

From Forbes:

The global energy transition is happening faster than the models predicted, according to a report released today by the Rocky Mountain Institute, thanks to massive investments in the advanced-battery technology ecosystem.

Previous and planned investments total $150 billion through 2023, RMI calculates—the equivalent of every person in the world chipping in $20. In the first half of 2019 alone, venture-capital firms contributed $1.4 billion to energy storage technology companies.

“These investments will push both Li-ion and new battery technologies across competitive thresholds for new applications more quickly than anticipated,” according to RMI. “This, in turn, will reduce the costs of decarbonization in key sectors and speed the global energy transition beyond the expectations of mainstream global energy models.”

RMI’s “Breakthrough Batteries” report anticipates “self-reinforcing feedback loops” between public policy, manufacturing, research and development, and economies of scale. Those loops will drive battery performance higher while pushing costs as low as $87/kWh by 2025. (Bloomberg put the current cost at $187/kwh earlier this year.)

“These changes are already contributing to cancellations of planned natural-gas power generation,” states the report. “The need for these new natural-gas plants can be offset through clean-energy portfolios (CEPs) of energy storage, efficiency, renewable energy, and demand response.”

New natural-gas plants risk becoming stranded assets (unable to compete with renewables+storage before they’ve paid off their capital cost), while existing natural-gas plants cease to be competitive as soon as 2021, RMI predicts.

RMI analysts expect lithium-ion to remain the dominant battery technology through 2023, steadily improving in performance, but then they anticipate a suite of advanced battery technologies coming online to cater to specific uses:

Heavier transport will use solid-state batteries such as rechargeable zinc alkaline, Li-metal, and Li-sulfur. The electric grid will adopt low-cost and long-duration batteries such as zinc-based, flow, and high-temperature batteries. And when EVs become ubiquitous—raising the demand for fast charging—high-power batteries will proliferate.

Many of these alternative battery technologies will leap from the lab to the marketplace by 2030, the report predicts.

Some of these changes will be driven outside the U.S., specifically in countries like India, Indonesia and the Philippines that prefer smaller vehicles.

RMI analyzed the four major energy-storage markets—China, the U.S., the European Union and India—and found two major trends that apply to each: 1) “Mobility markets are driving the demand and the cost declines,” and 2) “the nascent grid storage market is about to take off.”

[Read more here]

Technological change is often driven by demand.  When there is profit to be made from a shift in production techniques or new ways of doing things, then new ways are found.  The first industrial revolution was powered initially by the need to expand one side or other of spinning and weaving.  John Kay's Flying Shuttle in the 1730s increased the need for spinners.  The invention of Richard Arkwright' Water Frame and James Hargreaves' Spinning Jenny flipped the imbalance the other way.   This meant further improvements in weaving machinery were necessary.  This led to a need for more powerful motors, and the invention of the steam engine, which in turn required better processes for making iron and steel, which in turn led to the development of the railways, themselves heavy users of iron and steel and coal. 

Now, the need is for batteries which can store lots of energy and release it quickly enough to drive EV motors while also being lightweight and easy to charge quickly.  This is driving very rapid technological advance, which mean batteries are getting much cheaper and better every year.  Cheap and efficient storage, combined with similarly rapid advances in wind turbine and solar PV technologies, will drive the internal combustion engine, and gas/coal-fired power stations, out of the market.  The only question is, how quickly—no longer whether, just when.  From an investment perspective it is always very painful to be on the wrong side of a rapid technological revolution.

Incidentally, battery costs have been falling by 20% plus per annum for a decade now, and forecasters who assumed this process would slow have been repeatedly wrong.  Of course, one day it will slow, but usually when technological advance slows, it doesn't hit a brick wall, it decelerates gently and we approach the limits asymptotically.  There is no sign of that happening yet with lithium-ion, and even if it did, there are numerous new technologies being developed right now which will enter commercial production within the decade.  If we assume that the 20% per annum decline continues, by 2030, battery storage will cost 1/12th what it costs now.  Which means that by 2030, no petrol/diesel cars will be sold, and no coal or gas power stations will be any longer in use.  They will all be stranded assets.  You have been warned.

The writing on the wall for coking coal

Here ("Coal's last hope"), I talked about the crisis facing thermal coal, the kind used in power stations.  But coking (or metallurgical) coal, used to manufacture steel, also faces a potential crisis.

Via Kobad Bhavnagri of BNEF.

New research by @BloombergNEF  shows renewable hydrogen has the potential to cut emissions from steel making in half and hobble the market for coking coal at a carbon price less than $50/t by 2050. [The European carbon price is currently US$28.50/t]  

It is technically viable to decarbonize the entire steel making sector at a carbon price of just US$35-50/t CO2 by 2050 using hydrogen technologies. This would eliminate 7% of global greenhouse gas emissions.

A complete displacement of coal- and gas-based steel making is unlikely by 2050 due to the difficulty of writing down assets, but between 10-50% of global steel production could be from hydrogen if carbon pricing is widespread.

Hydrogen-based steel could first become competitive with coal-based production (without a carbon price) by 2030, where coking coal is $310/t. As hydrogen prices fall, it becomes competitive with coking coal at $200/t.

The technology to make fossil-free steel is already currently operating in many parts of the world. New plants can be constructed using Direct Reduction technology, first operate with natural gas and then transition to hydrogen once economics/policy allow.

The potential for hydrogen to displace coking coal at surprisingly low carbon prices should give investors serious pause for thought. Metallurgical coal is not immune from the changes sweeping the energy sector; hydrogen extends the reach of renewables into its front-yard.

I think the obvious symptoms of a climate emergency (drought, heatwaves, floods, hurricanes) will make the political imperative to do something about carbon emissions an irresistible force.  We have to reduce CO₂ and methane emissions to zero by 2050.  And the most practical way to encourage that is to introduce a price for carbon, which starts out low and rises steadily over time.  Countries or regions which already have a carbon price, and are making an effort to cut emissions, will not allow other countries to free-ride on their efforts.   The best recent example of this is the EU postponing ratification of a trade agreement with Mercosur, because of Brazil's burning of its Amazon rain forest.   The pressure is on, and carbon prices across the world will just get higher over time.  This spells the end not just of thermal coal but metallurgical coal too.

That leaves cement production, air travel, sea transport and, the elephant in the room, emissions from agriculture.  But does anyone think these sectors will be let off as the level of CO₂ in the atmosphere steadily rises and the climate emergency worsens?

[See also Iron and steel without fossil fuels]

Cement produces more CO2 than trucks

From Bloomberg:

The most astonishing thing about cement is how much air pollution it produces.

Manufacturing the stone-like building material is responsible for 7% of global carbon dioxide emissions, more than what comes from all the trucks in the world. And with that in mind, it’s surprising that leading cement makers from LafargeHolcim Ltd. in Switzerland to Votorantim Cimentos SA in Brazil are finding customers slow to embrace a greener alternative.

Their story highlights the difficulties of taking greenhouse gases out of buildings, roads and bridges. After wresting deep cuts from the energy industry, policymakers looking to extend the fight against global warming are increasingly focusing on construction materials and practices as a place to make further reductions. The companies are working on solutions, but buyers are reluctant to pay more.

While architects and developers concentrate on the energy used by their buildings, it’s actually the materials supporting the structure that embody the biggest share of its lifetime carbon footprint. Cement’s contribution to emissions is especially immense because of the chemical process required to make it.

About two-thirds of the polluting gases that come from cement production stem from burning limestone. Kilns are heated to more than 1,400 degrees Celsius (2,600 Fahrenheit), about four times hotter than a home oven set to the self-clean cycle. Inside the kiln, carbon trapped in the limestone combines with oxygen and is released as CO2, the most abundant greenhouse gas.

A ton of cement yields at least half a ton of CO2, according to the European Cement Association. That’s more than the average car would produce on a drive from New York to Miami. And a single mixer truck can carry about 13 tons. Hundreds or even thousands of tons go into ordinary office buildings.

What comes out of the kiln is called clinker, the key raw ingredient of cement. It’s the substance that, when mixed with gypsum and water, binds with gravel to harden and form concrete. Many companies are working to cut the amount of clinker in their cement, which requires new and sometimes untested recipes.

Others are looking at substitutes. Those include fly-ash, which comes from the chimneys of plants that burn coal, or slag from steel-making blast furnaces. They trigger a chemical reaction and form what’s known as a geopolymer binder.

Geopolymer cement has performance advantages and a huge sustainability edge over traditional mixes, according to Cameron Coleman, chief executive officer of Wagners Holding Co., which is based in Toowoomba near Brisbane in Australia.


“This alternative eco-friendly binder technology reduces the carbon emissions associated with normal Portland cement by 80% to 90%, and also has a much lower embodied energy,” Coleman said by email. “We have been working with leading companies in South East Asia, New Zealand, India, Europe and the Middle East who are extremely interested in adopting this technology.”

That strategy won’t work for long in Europe and the U.S., where fly-ash is the main clinker substitute and coal plants are closing. There, the focus is on efficiency and using fossil-fuel alternatives for heat. The European Cement Association says its producers already get 44% of their energy from cleaner sources and wants to raise that proportion to 60% by 2050. Instead of using coal, it’s creating heat with used tires, mineral oil and industrial waste.

[Read more here]

I am very confident that the world will replace fossil fuels in electricity generation within 20 or 25 years, and will convert most land transport to EVs over the same time frame.  This will happen because people are getting frightened by global heating and the climate emergency, and because the costs of these new technologies are plunging. Why not do something about global heating when you'll actually cut costs by doing it?

But that will leave agriculture, iron and steel and cement, which by 2040 or 45 could make up 80% of emissions.  There are alternatives in cement production as this article discusses.  There are others: I talked about green concrete here.  Iron and steel could be produced using methane or hydrogen to reduce iron ore to pure iron.  Unlike electricity from renewables or EVs, these will not be cheaper than their high-carbon equivalents.

Clearly, to encourage the update of low-carbon cement and steel, we need a price on carbon.  In Europe, there is one, currently €24 (US$ 27) per tonne of CO₂.  It's only a question of time before Europe starts applying that price to the carbon content of imports from countries which do not have a carbon price.  The surge of Greens in the recent European elections makes that inevitable.  All the conventional parties are starting to feel how the breath of environmentalism is starting to become a breeze and then a gale.  What's more, the current extreme heatwave in Europe, as bad as or worse than last summer's,  will only harden attitudes.  With a carbon price, cement and steel will start to produce low-carbon products.  And the only remaining sector to de-carbonise will be agriculture.  But it will happen there too.  Because it has to.