Two steps forward, one back for 'peak carbon' and breakthrough batteries
Before we get too excited about October's biggest news in clean technology and energy progress, we need the right economic, policy and consumer tailwinds behind us. How are we doing?
The best news to appear in a month unusually short of good news - even by 2023 standards - was the International Energy Agency’s declaration that the world will soon pass peak carbon. But is the IEA being too optimistic?
US energy giants Chevron and Exxon are doubling down on fossil fuel production, BP and Shell scaling back their investment in wind and solar. The high interest rate environment is cutting into major capital projects in renewables and cooling consumer excitement for EVs. We try and cut through the noise to find the truth in this story.
Elsewhere, Toyota announced in October that they are close to a manufacturing breakthrough in solid state batteries, a game-changer for EV range and efficiency and long distance freighting, if not even aviation.
If you’re new here and arrived via our ‘Windows on net zero culture’ research report, thanks for downloading. If you’re a regular, thanks for sticking with us - we aim to be a crucial digest of the opportunities for creative business and communications as the race to net zero reshapes society and culture. By keeping our eyes on the macros forces - from clean energy and electrification to sustainable manufacture and changing diets – we front-run the big changes coming through in consumer tastes, attitudes and behaviour.
Are we really at Peak Carbon?
The World Energy Outlook 2023 from the International Energy Agency (IEA) claims the tide will turn and global CO2 emissions begin to decline at latest by the middle of this decade. Encouragingly, a number of macro factors seem to be acting to accelerate this shift - governments have increased their targets for renewable energy dramatically as markets have made solar and wind emphatically the cheapest energy source. The bitter experience of the Ukraine war and ensuing energy crisis, and continued fears of Putin weaponising oil and gas, are providing keen motivation. The net result is that IEA have brought forward last year’s estimate for peak Carbon by two years and this may continue to fall dramatically.
However, US oil giant Chevron is taking a contrarian position against IEA forecasts with a $53b bid for Hess Corp. which will secure its ability to deliver oil and gas across the world way past IEA estimates. Exxon is on the same side of the bet with a $60b bid to buy Pioneer, which is by far the biggest oil producer in the US’ Permian Basin. Analysts cite a longer than anticipated transition to green energy as logic for these companies diverting investment from those efforts back into more oil.
Mere mortals might rightly ask, who is right here??
Yahoo! Finance reports IEA’s base case as anticipating the world consuming up to 102 million barrels a day of oil at its peak before falling slightly to 97 million barrels a day by 2050. Expanding population and growth of the middle classes in emerging markets will drive oil demand, even as it drops in the developed world. And, no doubt, in the short to mid-term, pressures on infrastructure projects in the renewables market are coming from all angles, none more crippling than inflation and interest rates. So, betting on more oil demand for longer in the transition looks attractive right now.
Who’s right?
That depends on what happens next in the economy. If rates come down, projects will survive, investment and incentives will flow and we’ll sale past peak Carbon. If inflation - and with it high rates - persist while energy supply remains tight, energy companies will make hay by spending record profits on new discovery projects.
Analysis: Global CO2 emissions could peak as soon as 2023, IEA data reveals (Carbon Brief)
Chevron Bets on Peak Green Energy – Wall Street Journal
Why Exxon and Chevron doubling down on fossil fuels makes sense (Yahoo! Finance)
Are batteries having their ‘mobile phone’ moment?
Toyota’s claim that they’ve achieved a breakthrough in their decades-long pursuit of a battery holy grail – solid state technology which would allow range of 1,200 kilometers on a single charge – could be “as momentous as [the shift] from… landlines to mobile phones,” reports the FT. If successful, it would “shake up the auto industry… have geo-political implications given Western anxiety about China’s current dominance of batteries… and it could open up the application of batteries in new areas of transport such as aviation,” they say.
Reading between the lines, it looks likely this lab-based progress would still be a long time reaching the consumer – probably too long to impact the growing adoption of the current battery standard in the EV market.
But this depends on whether EVs can maintain their momentum. Last week, poor outlooks from EV chipmakers dovetailed with a decline in demand predicted by major auto manufacturers to suggest a slowdown in the pace of adoption.
One reason for this is a shift in the consumer segment that EVs now need to target – the tech early adopters are all on board, now comes the tougher task of convincing the majority. Have the car brands cracked the formula for bringing them in? It’s an especially difficult challenge when much of the mainstream media seems motivated to pour cold water on the technology.
How solid-state batteries could transform transport – Financial Times
EVs Were Supposed to Be the Answer. Now They’re the Problem - Barron’s
Heat Pumps become a no brainer for EU governments
Just half the funds spent by EU countries on subsidizing fossil Fuel heating would be enough to transition all European home heating to renewables by 2040, according to a European Environmental Bureau report.
Italy stalls on cultivated meat ban
A proposed ban on the clean meat technology has stalled before its presentation to the European Union, after more than 2 million people and 3500 municipalities in Italy signed a petition against it.
About 33_Zero
33_Zero believes the net zero challenge will reshape culture and consumer behaviour with a force brands are unprepared for. The opportunity is to move in step with these changes as they go from the margin to the mainstream.
33_Zero’s sister organisation, Earthtopia, is one of the largest eco-communities on TikTok with a much bigger audience than Greenpeace or Extinction Rebellion and provides a unique window into the consumer change-makers leading the charge.
We offer brands the opportunity to research with the Earthtopia community and draw on our strategic focus on net zero culture to develop creative solutions to the biggest challenges and opportunities that face them today.
Email jamesp@33seconds.co to find out more.