Doing the hard yards: Tackling the hard to abate sectors for net zero

Join Bryden Wood's Martin Wood and Adrian La Porta as they explore the most difficult parts of the economy to decarbonise – the mission to make the toughest sectors of our economy carbon-neutral.

Inspired by the Climate Change Committee's recent findings, this episode unpacks why industries such as steel, cement, chemicals, and aviation pose unique challenges for achieving net zero.

They explore innovative pathways beyond simple electrification, the necessity of viewing technologies within an integrated network, and the critical role of governmental intervention (through both ‘carrot’ incentives and ‘stick’ mandates). Listen in to discover why focused action on these difficult areas is paramount for meeting global climate targets and what collective steps can be taken.

To learn more about Bryden Wood's Design to Value philosophy, visit www.brydenwood.com. You can also follow Bryden Wood on LinkedIn.

Transcript

Intro: 0:01

Welcome to the Bryden Wood Podcast. Bryden Wood is a global strategy and design consultancy. We are inventive thinkers, designers, engineers, and technical experts. We integrate creativity and deep experience to resolve complex challenges and realize a better world. Find us at Bryden Wood dot com.

Martin Wood: 0:27

Welcome to Bryden Wood Podcast. Uh, I'm Martin Wood and I'm joined by Adrian La Porta Uh, we're here to discuss, uh, the hard yards decarbonization, as we call it, uh, in light of the Climate Change Committee's. Um, report to the, uh, government parliament today. Um, we are highlighting the fact that whilst the report, uh, contains a lot of really valuable. Um, uh, ideas, information, and demonstrates the progress since the 1990s in decarbonization generally of the uk. Um, the challenge now really for net zero is to address, um, some of the, uh, much more difficult to reach areas of decarbonization, where electrification, for example, is not the obvious solution and, uh, other solutions are required. So, um, on that point, really, I. Firstly, we should outline what we mean by the hard to decarbonization. Um, Adrian, can you gimme some thoughts on,

Adrian La Porta: 1:30

um, so, uh, uh, I guess the, the sectors, what we normally mean by hard to decarbonize would include iron, steel, cement, concrete, uh, chemicals, uh, and heavy transport, uh, aviation. Uh, so quite

Martin Wood: 1:47

a lot

Adrian La Porta: 1:47

to go at.

Martin Wood: 1:48

The reason I guess we are here today talking about, it's because we, Bryden Wood, were involved in significant number of new technologies and investments in the sector of, uh, decarbonization. And the only issue, uh, is whilst that's obviously tremendous to stimulate the, uh, development of these new technologies and the scaling of these new technologies, um, investment in these technologies are very individually motivated effort. Um. Obviously, obviously for commercially gain of the investors naturally. But, um, the question really is, this is obviously a, a group effort. It's a team effort and it requires, um, the right technologies to develop at the right rate. Some of them will. Through and become, uh, mainstays of decarbonization, although all sort of wither on the vine as they go. And, um, one of the questions is really to try and contextualize these different new technologies so that we get some sense of, um, their overall value in the network of decarbonization rather than just in and of themselves, something that concerns us because, um, it's, it's one thing to work on individual technologies, but it's another thing to understand what they're. Contribution is to the overall, um, decarbonization effort.

Adrian La Porta: 3:07

Yeah. And, um, there's a, there's a perhaps a point that comes before that, which is we are looking at technologies at different stages of development, sort of mid TRL level typically. Um, and, um. We have to look at the timescales in which we need to achieve these productions in decarbonization. Um, 2050. 2030 Often used as, uh, as benchmarks for different, uh, technologies, but, um, we kinda need to get on with it. So, so, uh, uh, there is, um, a. Requirement, a pressure on us to, to use the technologies that we have and get things into operation and working now. Um, but coming back to your point, uh, we do, um, look at individual companies technologies, and that's, uh, often through the, the lens of a capital investment. Um, but a lot of these, um, technologies, when we're looking at basic chemicals or fuels. They don't sit very well as standalone investments. So, uh, if we look at the current, um, environment for fuels and chemicals, they come from highly integrated refineries, for instance. Uh, and that those highly integrated systems have been built up and perfected over decades, uh, over a century, I guess. And, um. When we look at, for instance, aviation fuel coming from a new technology, does it really make sense to look at that as a standalone single product facility, or does it have to be part of an integrated system to be more economically viable?

Martin Wood: 5:00

Yeah, I mean, so one of the things that we're often needed to be achieved in the hard to decarbonization sectors is, is areas where electrification simply isn't gonna. It isn't gonna work. So for example, uh, transportation, those sectors, as we said are aviation where we know that, um, batteries, uh, are in no reasonable timescale are going to be able to be, uh, high enough density energy sources for, um, for aviation. Therefore, we're looking for alternatives, which is, uh, sustainable aviation fuel as a term of the moment, which we can be burnt in relatively conventional unmodified engines and mm-hmm. Aviation. So effectively, uh. Replacement for, for, for hydrocarbon kerosenes. Um, and there's a number of pathways to achieving, um, sustainable aviation fuel. I know, Adrian, do you want to talk about some of those obvious pathways to, to saf and you know, how they, how we might. They might be balanced with each other to create the best and most economic route to saf. And that's a, it's a, a very broad question, but, uh,

Adrian La Porta: 6:04

well, as, as you, as you know, we've been working on a number of, uh, uh, biogenic, uh, routes to aviation, sustainable aviation fuel. Um, and, um, it, it seems likely that, um. Uh, biogenic, um, sustainable aviation fuel is, is gonna be a, a big part of what we, we use in the early stages of, uh, of saf. Um, and then there's an another classification, which I think some people refer to as E fuels. Um, the, uh, um. Almost, uh, magical process of turning CO2 back into useful fuel through the, uh, use of fairly liberal amounts of energy. Uh, which, uh, I think the way I've described that, uh, suggests I might be somewhat skeptical about that, that arena. Um, so, um, to answer your question, yeah, we, we are looking at different, uh. Biogenic roots primarily at the moment. Um, and the interesting, and an interesting factor about all of these biogenic, uh, roots is that it's a fundamentally different, uh, way of looking at feedstocks. So for, for all of these, um. Uh, sources of carbon, the feedstocks are very widely distributed, so we, um, compared to, um, an oil field, for instance. So we have a, a new paradigm of. Technology deployment or plant deployment that we have to, to understand. So because we have to collect all this material together, um, to, uh, to process it and, and turn it into fuel, and that's, uh, an economic, um, dimension that we haven't had to, to think about, I think with, uh, conventional fuels. Well,

Martin Wood: 7:53

yeah, it's, it's quite interesting you mentioned the, um. The e fuel argument because a lot of these, uh, pathways, uh, to decarbonization just require a vast amount of energy to be poured into the process in the first place. And the assumption is that energy is all green energy. It's been obtained from sustainable because it's been obtained from renewables. Mm-hmm. Or a nuclear plant or some decarbonized, uh, energy source. And um, and that's one of the things that is not necessarily. Being contextualized that well is, yeah, okay. It's fine to decarbonize, but actually where, where are those power sources come coming from, and would they actually just remove those power sources from where they should be being used to in a more conventional and typical way to, for example, light and heat people's homes. Or for transportation, car charging, et cetera, et cetera. So it's coming from somewhere and, and unless, unless there becomes a, a huge surface of renewable energy, huge surface of renewable energy, then um, it's gonna be quite difficult to justify the use of that energy for the production of say, an e fuel for aviation. It seems to us at the moment. And that's partly where some of our sinism comes from. Um, it's interesting the aviation Phil, because it's being mandated at least. At least by the eu. Yeah. Um, of the percentage use of of carbon, uh, neutral fuels within a sustainable aviation fuel. Um, and therefore that's stimulated by that, which is a collective governmental action. Uh, perhaps there are other areas where that isn't necessarily the case at the moment. There needs to be more thought on how that's gonna be stimulated in the first place, because most of these technologies. Are hard to justify from an investment point of view unless they're stimulated, uh, yeah. Uh, by some mandating process. Yeah. It's economically on their own. It's unlikely. So standard by aviation fuel perhaps is a good example because perhaps that's, uh, an example of doing the right thing.

Adrian La Porta: 9:56

Yeah.

Martin Wood: 9:57

But I think there are other areas where, uh, quite significant perhaps people don't realize that the carbon impact of those, um. Those particular sectors, and yet they're not getting the mandating in the same as the same sustainable aviation field.

Adrian La Porta: 10:12

Yeah, it's a, it's an interesting point. And we, you know, to shift the focus, we might, uh, consider, uh, cement and concrete, for instance, uh, uh, two, two materials close to your heart. Yeah. Close by heart. Um, but, um, before you respond, I think the, the aviation field discussion shows how important, uh, government. Interventionists that, as you say, the markets as they are currently framed are not going to push the progress that we need fast enough, in my opinion. So, um, these are big problems and complex, uh, societal, um, and economic problems. So therefore it does require public sector, um, action as well as to to frame those markets and, and push them in the right direction. So if we take cement and concrete for brands for, for, for instance, what intervention might be needed? Well,

Martin Wood: 11:05

I mean that, that, that's really this, it's, it's almost like how you design mandates to, to, to have the best effect. Yeah. Um, the, the one, the, this first does frustrate me that the cement one, because I look at, for example, the value of, um, finished concrete structures of which we all know how important they are to us for infrastructure and buildings. Mm-hmm. Um. And I think, I think it's actually broadly understood by people that, that, that there's, there's an issue, uh, with the carbon content of, um, of these structures. Uh, I think that's, that's be become common knowledge now. Mm-hmm. Um, but it, it comes from all across the, the area of the structure. But the, but, but at the heart of it is the cement that there's the biggest culprit. Mm-hmm. And that's because the cement goes to, you know, cow signing process and it. Reduces carbon dioxide as part of the reaction in the first place. And it also uses vast amount of energies to do it. Yeah. Um, now both of these can be cleaned up, uh, to an extent, not entirely, but to mm-hmm. To, to within cement production, but it just takes very large investment and people go, well, it, it, it would seem, it seems like massive investment for the cement manufacturer, and it would likely cause the cement to be. Significantly more expensive. Having said that, if you think about the cement as a component of the overall cost of a structure or of a, of a, of a building structure or of a road structure or a railway, whatever structure, the, um, cost of a cement, if it was quadrupled, would be quite negligible compared to the absolute overall outturn cost of that structure. So therefore, you could effectively mandate the, um, reduction in the carbon of cements. And you could, um, have quite a profound effect and actually not as big effect financially as, you know, the overall outcome as people may think. So it, it, there's a question. There is, but how do you get, how does, how, how can that be constructed? Uh, yeah. That, that either incentivization or mandating. So of course there's two things there. We, we, that's an important point in itself, you know, is this a carrot or stick approach, you know? Mm-hmm. Can you, can you put in places which encourage people to do it, like carbon sequestration? Where you get paid for, you know, the amount of carbon you sequestered, but most, uh, significant economies have now put those in place in some way or other. Mm-hmm. And that's an incentivization thing And other things, areas where they're just going to mandate, for example, sustainability, aviation, fuel safety. Yeah. How do we use this current stick approach across all different industries to reach the. Uh, hard to decarbonize areas and make people want to invest in those technologies, uh, leading technologies to make that happen more quickly, because otherwise they won't keep pace with the, i I hate to say simpler challenge of vast electrification of transportation. That's a big enough, big enough, but, but, but they'll get left behind. Yeah. And we'll effectively. Fail to meet the net zero targets.

Adrian La Porta: 14:08

Yeah, I mean, um. Again, my personal opinion is, is that with the speed that we need to move, then there'll have to be quite a lot of stick, um, along with the carrot and, and probably in the UK there's a sort of institutional preference for carrots. It's not very

Martin Wood: 14:24

popular at the moment.

Adrian La Porta: 14:25

Stick's not very popular, but, uh, I also think of the, um, the plastic bag ban. And, uh, I think in Ireland they brought the plastic bag ban in just as a mandate. And the UK for many years had had a, you know, an encouragement and some, a quite a lot of carrot and, uh, in the end they just had to bring in the stick. I know it's a long way from concrete, but um, at more of a political, uh, philosophy point. Now,

Martin Wood: 14:51

you know, one of those things is, you know. Law, unintended consequences. So you've just have

Adrian La Porta: 14:55

to make sure that these things are well targeted. Yeah. Almost impossible to avoid some unintended consequences.

Martin Wood: 15:03

Yeah. And, and I, I think that's, I think that, but the idea that the market will, will fix this entirely is cl clearly Yeah. Fairly absurd. So, um, it's going to need a lot more, um, uh, scrutiny each and that, and that's one of the concerns, I guess, is that, how can I, I dunno. How many, the exact numbers of them are. But there, there's, there's so many different new technologies, um, competing in space at the moment. Um, that it's understandably difficult. I mean, we work in the sector.

Adrian La Porta: 15:35

Mm.

Martin Wood: 15:35

But it's difficult for us to get our. Heads around all the different opportunities and options that are in play at any one point in time. Because you're not working on all of 'em. I mean, you're working on some of some of them. So you have to sympathize with policy makers. Oh yes, absolutely. And say, well, how on earth is all that knowledge gonna reach them without, um, some sort of debate and some sort of focus that this is, becomes a common theme of our podcast is how to create a, um, common source of truth, you know? Single point of truth really. I understand. So that, so that policy makers and so can actually draw upon that. Yeah. And say, well actually these are the kind of, the, the policies, these stick policies that we need and these are the kind of carrot incentivization policies we need. And these will have the least unintended consequences that will go most directly to the, to the heart of the problem.

Adrian La Porta: 16:22

I think we see, uh, we see lots of individual companies full of very talented people, uh, passionate about their technology, um, with great support, but they are still single, single technology companies as a, as a, um, in our experience. And there seems to be a lack of some kind of, um, integrator. Type organization. I dunno whether that would be a public sector, private sector, or something that needs to be formed from a combination of both that allows you to bring these technologies, technologies together, um, to assess them against each other in a. Slightly less, uh, commercial pitch way, you know?'cause if you are, if you are, if you're a single technology company, you're gonna pitch that as, as hard as you can. That's your job. Yeah. But, um. If we were back in the 1950s in ICI, would we be, have a more systemic approach of looking at a basket of different technologies and how they work with each other. Um, 'cause we don't have those kind of chemical companies in the uk. Well,

Martin Wood: 17:39

it's interesting what you're, what you're sort of referring to is that is the gap that I think that is, uh, that is concerning us, which is that it's one thing to have. Um, the Climate Change Committee Yeah. Change committee, for example, which it's kind of up here, up here, which is fantastic. Making, making all the right kind of statements of intent. Yeah. And based on needs and so, and, but, but then there's a bunch of people investing. Um, in sometimes something of a spread betting kind of a way in new technologies. Um, and then there's a sort of gap in between where, where, where the, some of the high minded principles and some of the actual work on the ground mm-hmm. There isn't quite the connection between the two without connecting the two. They, um, you know, being out evaluations very difficult to evaluate without actually being involved. At, uh, at that level. So, yeah. So I think that's, that's what concerns us really, is the, the gap between the strategy and the execution. Yeah. Um, what's happening in the middle, that that's where we need to bring that understanding. Um, I saying to, and, and that needs to be brought to policy makers. That's not, I mean, that's not just us. We're just one of the people involved in this area. But, but, um. There's a quite, uh, uh, a group of people who, um, are posting about these subjects, um, frequently Yeah. On platforms. Um, and, you know, there's some, there's some good debates going on there. But again, what is the, how, how do we collect this thing? Yeah. Together to, to create the, uh, fastest progress towards action and the fastest progress towards, um, to, towards decarbonization.

Adrian La Porta: 19:18

You know, a lot of these sectors as well are not sectors that are well suited to, to small and medium sized enterprises. So if you are making fertilizer, for instance, or, or steel, these are, these are, uh, not, not businesses you enter with a small amount of capital. So they're, they're big concerns that require heavy investment in many years of, of sort of institutional. Growth for you in those industries as well, so that that's, that's a barrier as well, isn't it?

Martin Wood: 19:47

Well, and they also have, unfortunately, especially in a, in, in a, in, in a current world situation where people are becoming, um. Are slightly concerned about the level of deep globalization that's occurred. Mm-hmm. They're looking for, for example, steel production closer to home.

Adrian La Porta: 20:04

Yeah.

Martin Wood: 20:04

Energy production closer to home. And that puts a whole other SLT onto things as well, because, um, uh, you know, perhaps, perhaps the, perhaps as an opportunity in that, because as, as, uh, facilities are brought. Onshore as people call it, for, uh, those nations, then obviously they need to be put in place with using newer technologies. And those newer technologies should be decarbonizing their own rate, their own right. So maybe there's something in the, uh, concept of not exporting your, uh, your dirty industries to other countries, which has happened in the past. So, for example, the reduction in, um, reduction in. Uh, the missions of the UK since the 1990s, which the, the Climate Change Committee, uh, referred to in their reports today, um, is great. But part of that's been, uh, achieved by just basically exporting some of your manufacturing industries to other countries. Yeah. And where the emissions actually may be more extreme than they were, they were originally in the, the uk. Yeah. It's not accusation just a, just probably a fact. Um, that's not really a way of addressing the problem. Um, properly. So, uh, I think in, in, if, if a certain amount of security related onshoring is gonna occur, then at least it should occur in a way which is, um, uh, which has a better carbon profile this time around.

Adrian La Porta: 21:27

I mean, that, that, uh, opens up a, uh, an interesting technical topic about, uh, scale and, and multiplication, which is, uh, something we, we talk about a lot here and, uh, finding the right scale and ways to, uh. Systemize or modularize, uh, technologies is a, is an interesting, um, dimension to this problem, uh, particularly given the feed stop distribution issue that, that, uh, I raised earlier.

Martin Wood: 21:56

Well, there's a, there's an interesting point. It's about means very, this is a almost a, uh, too broad a topic, but Yeah. Yeah. There's a topic of, there's a whole topic of the, the, the carbon, uh, the transportation carbon. Impact of having, uh, super globalized industries where, you know, it, it's been largely done in one or two or three locations around the globe, and then it's been distributed from that, that, that particular location. I mean, still's a good example. It's not, it's not like it's a, not like it's a light material, easy material, particularly to transport. Mm-hmm. Um, it's just that the investment in the, in the, in the last furnace in the first place is so high. Um. So whether, whether there is going to be, generally speaking a, uh, greater, uh, drive towards distribution of, of, of energy and production that therefore sort of implies a scaling outta technologies. Yeah. Rather than scaling up of technologies or whether there's going to be just on the basis of a, because normally the technology, economically, some of these technologies economically, most of them react ably to scaling up. Mm-hmm. So you just go for bigger and bigger and bigger plants effectively. It's kind of like the refinery model you mentioned earlier. Yeah. Um, that needs to be slightly called into question by, uh, both the carbon required transportation, transportation bigger to get more difficult, um, and low carbon way. And it's also called into question by perhaps being honest about how the sort of tectonic plates have, um. Global politics are gonna work in the future. Mm-hmm. And, uh, security of some of these, um, critical energy and material infrastructures.

Adrian La Porta: 23:37

Yeah. Uh, and I think, uh, John Dyson's preparing a, a blog at the moment on the subject of scale and, and economics.

Martin Wood: 23:46

So this is, today was, uh, really a scene setting, um, uh, conversation about trying to contextualize the, the, the hard to decarbonize areas that. Maybe outside the immediate public perception of, for example, electrification of heating or transportation and so on. Um, and what we will be doing in further podcasts is to take a bit more slightly deeper dive into things like cement. Agrichemicals, uh, sustainable aviation fuels, um, and we'll introduce, uh, guests, um, with more knowledge on the subject than us in many instances, um, to discuss those with us.