Climate SOLUTION super tipping points.

To achieve green ammonia cost parity with grey ammonia and trigger tipping points, a globally agreed carbon price of about $100 per ton is required, a politically challenging goal in countries like the United States where approval requires congressional action.

“The systemic report argues that to get green ammonia to a lower cost than grey ammonia and therefore to hit the tipping points we're after, there will need to be a globally agreed carbon price of about a hundred dollars per ton. And as so many of this channel's U.S viewers have pointed out to me over the years... good luck getting that one through Congress!”

More than 99% of ammonia used in fertilizer production today is derived from grey hydrogen produced via steam reformation of methane, which releases large volumes of carbon dioxide; green hydrogen is made from water electrolysis powered by renewables with no carbon emissions at point of use, offering potential as an industry disrupter.

“You might not immediately think of fertilizer as a game-changing industrial sector, but more than 99 percent of all the ammonia used to make the stuff today is derived from so-called grey hydrogen that comes from the steam reformation of methane which releases a large volume of carbon dioxide into the atmosphere. Green hydrogen on the other hand is made from the electrolysis of water with no carbon emissions at the point of use as long as it gets powered by renewables. So it potentially represents an industry's disrupter which is being enthusiastically pursued by some big operators including Andrew Twiggy Forest over in Oz, who has almost literally bet the farm on capturing a very large part of the new hydrogen economy from vast new production facilities planned for sites in Western Australia.”

S-curves are an established economic phenomenon where new technologies initially grow slowly, then enter a period of rapid exponential adoption as costs fall and demand increases, before eventually plateauing; historical examples include infrastructure (canals, railways, roads) and consumer products (flushing toilets, radial tires, fridges, microwaves, washing machines).

“That kind of cross fertilization, so to speak, is one of the contributing factors resulting in the famous S-curves that economists often refer to. There are loads of examples of S-curves throughout history, and not just in major infrastructure projects like canals, railways and roads. They were often very banal and apparently dull products like flushing toilets, radial tires, fridges, microwaves and washing machines.”

The EV sector's infrastructure barrier blocks tipping points: at the end of 2021 there were 1.8 million EV charge points globally, but the market requires at least 5 million chargers plus necessary electricity grid upgrades to achieve a tipping point.

“But once again it's the infrastructure controlled largely by central government that's holding back progress. At the end of 2021 there were 1.8 million EV charge points around the world. What the market requires is at least 5 million chargers, plus the requisite upgrades in electricity grids to really hit a tipping point.”

Renewable energy grid infrastructure investment requirements will rise from approximately $300 billion annually to at least $500 billion by 2025, with additional pressure to dramatically shorten planning and permitting timelines across all countries, particularly in the EU where current processes exceed legal time limits in every country and some nations take five times longer than legislation allows.

“much greater investment is needed from central government, not just in America, but all over the world, in the infrastructure required for transmission and distribution, rising from about 300 billion dollars last year to at least 500 billion by 2025. They'll also need to be far shorter planning and permitting timelines for those new infrastructure installations. According to the Systemiq research, every single EU country currently exceeds legal time limits and some countries take five times as long as their legislation demands.”

Alternative proteins face significant barriers to mass-market tipping points: quality of taste, texture, nutritional value, and cost must all outperform existing meat products, an outcome that is by no means guaranteed; consequently the sector receives amber across all assessment dimensions.

“But in order to get there the quality of taste texture and nutritional value as well as the cost of course will need to outperform existing meat products, and that's by no means a given. So it's an amber across the board here I'm afraid.”

Food, agriculture, and land-use change represent a massive problem for long-term climate solution, but these categories score poorly in Systemiq's analysis partly because viewers and decision-makers avoid engaging with these topics, creating a feedback loop of inattention that perpetuates the problem.

“And then we come to food and agriculture and land use change which is usually the point where a large number of viewers hit the off button because they just don't want to hear about it. That's actually one of the reasons why these two categories score so badly in the analysis. But like it or not it's a massive problem and until it's faced properly there's really no chance of a long-term solution to the climate emergency.”

Battery costs have declined by 90% since 2010, and the levelized cost of electricity (LCOE) of solar plus batteries is expected to be cheaper than gas power in the US by 2023.

“Battery costs have come down by 90% since 2010 and the levelized cost of electricity or LCOE of solar plus batteries is expected to be cheaper than gas power in the US by 2023.”

Solar and wind made up more than 75% of all new global capacity additions in 2022 and now represent more than 10% of global power generation.

“Anyway back to renewables. Solar and wind made up more than 75 percent of all new global capacity additions in 2022 and now represent more than 10 percent of global power generation.”

Electric vehicles are projected to reach cost parity with internal combustion engine vehicles in the EU, US, and China by 2025, earning an amber rating; moreover, there is already arguably no cost disadvantage to EV ownership over the entire vehicle lifetime, which receives a green rating for attractiveness.

“According to the Systemiq research, in the EU, the US and China, EVs will reach cost parity with internal combustion engine vehicles during 2025, so that gets an Amber. And in fact there's arguably already no cost disadvantage to owning an EV over its entire lifetime, so the box for attractiveness gets a green.”

Alternative proteins are projected to capture about 10% market share by 2035, rising to 20% with adequate technological and policy advances; plant-based meat alternatives have already grown 50% in Europe and 73% in the United States, with even larger markets in China.

“The report projects that alternative proteins will gain about a 10% market share by 2035 rising to about 20 percent with the right technological and policy advances. The good news is that there's already been a 50% increase in the so-called plant-based meat alternative market in Europe and believe it or not a 73% increase in the States. And the market is even bigger over in China.”

Industrial-scale electrolysis for hydrogen production is still a nascent technology currently several times more expensive than steam reforming of methane, representing a major hurdle to green ammonia adoption.

“industrial scale electrolysis for hydrogen production is still a very nascent industry and the technology is currently several times more expensive than steam reforming methane. That represents a major hurdle.”

Current EV charging infrastructure (1.8 million charge points as of end of 2021) represents only about 36% of what the market requires (5 million chargers), creating a 2.2+ million charger deficit that must be addressed for EV tipping points to occur.

“At the end of 2021 there were 1.8 million EV charge points around the world. What the market requires is at least 5 million chargers, plus the requisite upgrades in electricity grids to really hit a tipping point.”

Steel, shipping, and aviation sectors receive green ratings for attractiveness of hydrogen solutions, but the Systemiq team holds only medium confidence they will achieve tipping points that could unlock mass-market S-curves.

“All those sectors get a green rating in their attractiveness box but the Systemiq team only have medium confidence that they'll hit tipping points that could unlock those mass-market S curves.”

Central government support for green hydrogen could produce cascading tipping points across steel (7% of global emissions), shipping (3% of emissions, receptive to alternatives to polluting bunker fuel), and aviation (2% of current emissions but projected to rise to nearly 15% by mid-century if continued fossil fuel use).

“But centralized government support for genuinely green hydrogen could produce really very significant cascading tipping points for the steel industry, which currently spews out about seven percent of global emissions, the shipping industry which makes up three percent of emissions today and which is an open door of receptiveness as shipping companies race to find alternatives to the absolutely filthy gunk known as 'Bunker Fuel' that they currently use, and for the aviation industry which accounts for about two percent of emissions today but which is projected to rocket up to nearly 15% by mid-century if it continues using fossil fuels to power its jet engines.”

The Systemiq report's headline assertion that transformational clean energy technologies will drive global tipping points is overstated; the distribution of green/amber/red ratings suggests constraints rather than imminent breakthroughs, warranting skepticism comparable to a poor employee performance review.

“So while this report's headline title could be construed as suggesting the world was on the cusp of some sort of major revolution in the way we operate our systems and run our everyday lives, I have to say that if I'd ever received an annual performance review form with that distribution of colours on the right hand side I think I'd have been looking for another job pretty quickly. If only some of our key lawmakers felt the same way, eh?”

Only 3 of the 11 key industries analyzed by Systemiq show high confidence of near-term tipping points: the power sector (26% of global emissions), road vehicles (12%), and fertilizer industry (2%).

“Only three of the 11 key Industries outlined here give the Systemiq team high confidence that they have the potential for near-term tipping points. They're the power sector, which is currently responsible for 26 percent of all global emissions, road vehicles which make up 12%, and the fertilizer industry which represents two percent.”

The Systemiq team assessed tipping points for 11 key zero-emission solutions using a green/amber/red color-coding system: green means no cost disadvantage and no barrier to tipping points; amber means cost parity is less than 5 years away with some remaining impediments; red means cost parity is more than 5 years away with significant barriers to progress.

“the Systemiq team arrived at an assessment of the status of tipping points for key zero emission solutions by sector using the tried and tested 'green/ amber/ red colour coding notation that I'm sure many of us have seen in our everyday workplaces on delightful documents like our annual employee review forms for example.”