Future Cleantech Priorities
Future Cleantech Priorities
Future Cleantech Festival 2024 took over the city of Remscheid, one of Germany’s last industrial cities, for two days on May 28-29th. Teaming up with our esteemed co-hosts UNIDO ITPO Germany, UN Climate Change, IRENA, and the European Innovation Council we immersed ourselves into cleantech innovation, showcasing cutting-edge cleantech solutions and approaches across the sectors of Transport, Construction, Innovation, and the Future Energy System. Future Cleantech Architects took the insights and key takeaways from the festival to create this report on actionable priorities for the next EU agenda.
During the Future Cleantech Festival 2024, we were glad to have again over 250 representatives from the public sector, private industries, and research institutes from over 20 countries together to discuss cutting-edge strategies and approaches in Transport, Construction, and the Future Energy System, and discuss the pressing priorities that the European Union must embrace to achieve its ambitious targets.
See a summary of our key takeaways below or…
Innovation
Key takeaways
To achieve global climate goals, a diverse array of innovative cleantech solutions must be deployed across sectors such as energy, transport, and construction.
Simply scaling up existing cleantech will not be sufficient to reach net zero. For instance, high-temperature processes above 400°C account for half of industrial heat demand, and solutions to decarbonize this are still lacking. The global cleantech manufacturing and innovation landscape is highly competitive and is currently heavily dependent on external sources for critical raw materials and sustainable fuels. Developing disruptive innovation is essential for maintaining competitiveness and independence, and will both help transform existing markets as well as creating new ones.
• After the adoption of ambitious global and European targets, the focus must now shift to implementation at the national level, especially through National Energy and Climate Plans (NECPs) and Nationally Determined Contributions (NDCs). This requires ambition, coordination, investment, and policy adjustments at the national level.
• In the EU, Member States must widely deploy cleantech, promote energy efficiency, and accelerate the development and deployment of renewable energy to meet the Fit for 55 targets. This includes that 5% of new installed capacity by 2030 comes from innovative renewable technologies.
• Disruptive innovation must be clearly defined to ensure alignment among stakeholders. This definition should consider the specific context and goals of each country or region. Successful innovation requires a deep understanding of the national context and priorities.
• Governments should ‘not do innovation but enable innovation’ by providing a supporting regulatory framework and fast, reliable funding for innovative projects. This includes direct investment in companies as well as support for start-ups.
• A cultural shift in the way we approach innovation and failure is necessary. Failure should be seen as an important aspect of the development process. Public, private, and institutional investors should be willing to take calculated risks and mitigate them.
• Public guarantees and risk-sharing instruments from entities such as the European Investment Bank are needed to de-risk cleantech investments and catalyze more private investment into high-risk cleantech ventures.
• Full-scale EU-level venture capital funds dedicated to cleantech could provide additional investment security, as could support from national disruptive agencies.
• EU Member States still subsidies fossil fuels (including with EU money) which hampers the creation of a true level playing field for renewable energy to compete. • EU-level taxation mechanisms or tax-break models should be created in order to match the simplicity and predictability of the United States Inflation Reduction Act (IRA)’s support to cleantech development and deployment in industrial processes.
• Successful cleantech development requires understanding and nurturing the entire ecosystem (incubator approach) - from R&D to scale-up to manufacturing.
• Green public procurement must be mobilized for innovative cleantech, incorporating non-price criteria such as resilience, innovation, and life-cycle assessment in public tenders to drive the development and deployment of cleantech.
• Natural gas has been a preferred fuel for various hightemperature industrial processes due to its high energy density, relatively low cost, and non-degradative material properties at high temperatures. Industries such as cement, steelmaking, glass production, ceramics, and chemical manufacturing have traditionally relied on natural gas for its consistent and efficient heat output. If there is a switch to renewable electricity, most heating costs will come from electricity. Therefore, the electrification of industrial heat could triple energy costs for some industries. Additionally, other factors influence the costs: the availability of biogas which may be limited, making thermal energy generation from electricity costly, while international competition from regions with cheap fossil fuels availability outside Europe poses challenges.
• Grid charges are often high, while renewable power itself is cheap. Current grids are quasi-monopolies and cannot match the growing electricity demand, which causes stress on transmission and distribution networks, while the high power and energy density of industrial demand means on-site renewable generation is often insufficient.
• Effective communication is crucial in managing expectations and maintaining public support for ambitious climate policies. The transition to clean energy, marked by a significant shift from fossil fuels to renewable sources, presents a complex and challenging process. This transition is extremely challenging, not ``a walk in the park``.
• Journalists are pivotal in communicating about climate change, ensuring the accuracy of information and opinions in energy and environmental journalism, especially when addressing misinformation. News coverage of climate solutions must rely on accurate context, scientific baselines, and peerreviewed evidence. Navigating the energy transition requires collaboration, expertise, and nuance. Communicating complex scientific information to various audiences requires embracing complexity, making it accessible, and providing transparency through citations and references. Journalists must be transparent, skeptical, and aware of their own biases when reporting on these issues.
• Finally, the role of journalism in the digital age is evolving, with social media platforms playing a crucial role in reaching diverse audiences. Building trust through transparency is essential, and journalists must adapt to the changing media landscape. The shift from traditional media to social media has transformed the way information is consumed, emphasizing the need for common ground in journalism, particularly in democratic contexts.
Air travel remains the fastest means of global transit and an essential enabler of touristic travel and trade, while shipping remains the most efficient and affordable means of global trade. The role of shipping and aviation will continue to rise in the coming years, as the global south rightfully develops and the world’s population continues to grow, but the imperative to reduce their impact on the environment is clear.
Shipping:
Most of the alternative fuels for maritime applications, such as ammonia and methanol, will be dependent on green hydrogen, which makes up 80%-90% of their costs. Additionally, the cost of green hydrogen is dependent on electricity prices and is unlikely to drop significantly in the near future. This is exacerbated by the low price of shipping fuel, which is usually some of the lowest-rated fuel, adding to the cost disparity. The carbon abatement cost of switching from low-sulfur fuel oil to green ammonia or green methanol is in the range of $600-$800/ton. This begs the question of what policy levers are needed to accelerate the deployment of green fuels and technologies.
The transition to alternative fuels requires infrastructure adaptation:
• A massive scale-up in production and supply of alternative fuels such as hydrogen, green ammonia, and green methanol from today’s levels is needed.
• Pressure will increase on the grid as additional electricity capacity will be needed with the shift to these alternative fuels.
• Infrastructure and materials must be reimagined to suit new criteria from these alternative fuels, such as ammonia’s storage and toxicity.
• Ports are crucial to providing the infrastructure to support the early stages of the sector’s transition, but they will need restructuring to adapt to new fuels with more demanding safety requirements.
Innovation in alternative fuels manufacturing is essential to decarbonizing shipping, but technologies must be brought to scale and costs must come down. To cross the valley of death, startups need access to feedstocks such as clean hydrogen and sustainable CO2 , support to scaleup faster, and accelerated funding schemes to begin work on projects faster.
The trade of green fuels between producer and consumer regions necessitates further collaboration amongst multiple actors, where proximity and mode of transport influence the final costs. This is crucial for the EU, which has historically been a net importer of bunkering fuel and may continue to be an importer of alternative fuel. Building relationships with trusted partners and establishing uniform regulations and certification for the development and trade of eligible alternative fuels, that adhere to a uniform standard of sustainability based on lifecycle greenhouse gas (GHG) emissions amongst other criteria, will be crucial to the future trade of clean fuels.
Aviation:
There are two main routes to reduce contrail formation. The first is through the utilization of Sustainable Aviation Fuels (SAFs), which have lower aromatic content that is directly linked with contrail formation. Using SAFs on contrail prone flights could help reduce their formation. The second approach is to reroute flights to avoid the regions with peak atmospheric conditions for contrail formation.
• Prioritizing SAFs for contrail prone flights is challenging as it will require an overhaul of the way fuelling systems at airports work today. Additionally, SAFs remain in limited supply and are restricted to a maximum 50% blend with conventional fuel per flight due to engine safety considerations pertaining to minimum aromatic content. Even if in the future 100% SAF operated flights are possible, SAFs alone cannot eliminate contrails completely. • Flight rerouting provides a pathway with one of the lowest carbon abatement costs with a price of 0.5$/ton CO2. Approximately 10% of all flights are prone to contrail formation. Even though rerouting requires additional flight time and fuel burn to avoid ISSRs, these are mostly small diversions resulting in minimal added fuel burn but significant environmental savings from contrail avoidance.
There is currently no business case for reducing contrails as it requires additional fuel burn, albeit a minimal amount, and is not included in science-based targets. The primary focus remains on CO2 emissions. If contrail avoidance doesn’t deliver economic savings, tax benefits, or equivalent carbon credits, there is little incentive for the sector to tackle the problem.
A holistic approach to addressing contrails is needed. Improvements in weather monitoring systems, predictions, and validation are key. Additionally, air traffic management must be brought on board to work with pilots and develop a standard operating procedure for contrail avoidance, which includes aspects such as identifying contrail prone flights and when to reroute. Finally, pilots must be brought around to tackling contrails, as they’ve been instructed for decades to fly efficiently and minimize fuel burn, and that message is changing with the need for rerouting.
Transport
Key takeaways
Currently, aviation and shipping together are responsible for ~5% of global annual CO2 emissions and are the two largest emitters in the transport sector after road transport.
Construction
Key takeaways
Concrete is the literal building block of the modern world, and the production of cement to make concrete contributes around 5% of global greenhouse gas emissions, or 7% of CO2 emissions.
Cement-making is viewed as one of the toughest hard-to-abate sectors, as 60% of its emissions come from the chemical reaction at its core, and even the remaining energy-related emissions are at such high temperatures (up to 1450°C) that few competitive or scalable low-carbon options exist today. Beyond the technical challenge, decarbonizing cement is difficult economically: a highly competitive market leaves slim profit margins to reinvest in R&D; plant lifetimes are long due to high CAPEX, slowing down the deployment of newer technologies. It also requires a systemic paradigm change of the construction industry beyond the cement plant. Nevertheless, many policy options can help to unlock some of these barriers and set the industry on the path to Net Zero. To do so, a holistic approach to the whole construction value chain provides more leverage than focusing just on the level of the cement plant.
Structural Efficiency:
Ambitious, long-term deployment targets for energy storage, both at national and EU levels, are necessary to ensure regulatory stability, encourage developers, and create an attractive investment environment. Deployment targets should be coupled with incentives to ensure stable revenue streams.
Like switching from incandescent lightbulbs to LEDs, it’s estimated that current buildings are only 2% structurally efficient in practice compared to the theoretical optimum, and that cutting emissions per building by a factor of 4 through structural efficiency is already technically feasible today.
We need to systematically collect data on structural efficiency for buildings and report this, just like we measure the energy efficiency of all appliances. Engineers can then be asked to deliver not just a safe building, but also an efficient one.
skewing towards cheap materials (thanks to cheap fossil energy) and high labor cost, which incentivizes overusing material. Historically, the opposite was true and efficient structures were the norm (e.g. see how much lighter the vaulted structures of cathedrals are compared to the thick flat slabs of modern building floors). This can be fixed by going back to the principles of structural efficiency, while using modern tools (such as algorithms, robotics, and off-site manufacturing with on-site assembly) to reduce labor costs and construction times.
Construction materials alone make up 40% of European waste streams. The sector has a long way to go in reducing inefficiencies and minimizing waste, focusing on dismantling for reuse, rehabilitating structures to extend their lifetimes, optimizing construction through structural efficiency, and providing lower-carbon alternatives for new cement usage.
Carbon Sequestration:
Of all industries, cement-making is the poster child for carbon capture and storage (CCS). However, even for this industry, CCS is no cause for business as usual: given its high cost (around 180-200 €/ton today and potentially 110-150 €/ton in the future), emissions reductions (e.g. clinker reduction) should always be the first priority; they also enhance the feasibility of CCS by reducing the volumes of CO2 to be addressed, so the two strategies go hand in hand.
Even with future cost reductions, CCS for cement-making is costly, roughly doubling the cost of cement. However, even with a high premium on the cost of “green” materials, the impact on the total cost of the final building is actually low, so the wider market should be able to absorb this premium.
The right geology is necessary to sequester carbon, and storage sites should be as close as possible to industrial emitters to reduce pipeline costs, hence why onshore is around 90% cheaper than offshore. Yet, there is a huge disparity in planned storage sites, in part from public reticence to onshore sites, with 90% of plans in the North Sea and very little in southern Europe.
...requiring a business case for all partners and coordination across companies and countries to build the required infrastructure (e.g. pipelines from countries like Switzerland and Austria would need to cross Germany to access storage sites). A regulatory framework is urgently needed to give the industry some security in developing this infrastructure.
Geological storage is not the only option; mineralizing carbon dioxide into rock is a permanent and scalable form of sequestration (e.g. using demolition concrete, the world’s largest waste stream).
As the energy transition unfolds, clean and flexible energy sources will be paramount in complementing intermittent solar and wind energy generation, ensuring a future resilient energy system without relying on gas turbines or polluting energy generation pathways. Clean firm power, such as enhanced geothermal, hydropower and concentrated solar power (CSP) with integrated storage, provide a reliable and consistent electricity supply from low-carbon sources, crucial to complementing the increased penetration of intermittent renewable energy sources like wind and solar into the power system.
Clean Firm Power:
The increased penetration of variable renewable energy has created challenges for power systems balancing. Consequently, some countries are relying on clean firm power from neighboring countries for grid stability (e.g., Germany partially relying on nuclear from France). To address grid balancing issues and reduce reliance on energy storage, it is essential to diversify intermittent renewable sources and integrate clean, dispatchable firm power such as hydropower, geothermal, and concentrated solar power (CSP1). For instance, developing hydrokinetic power plants and other decentralized forms of power generation can alleviate the load on central grids.
Adopt a holistic approach to enhance grid infrastructure, ensuring efficient energy transport from generation site to consumption areas. This includes strengthening interconnectors between countries to manage a higher share of renewable energy and enhance grid security. Enhanced grid infrastructure will support a more robust and interconnected energy network, facilitating the transition to a sustainable energy system.
Hydrogen is an indispensable feedstock for industrial applications such as fuels and fertilizer production. Clean hydrogen should be prioritized in sectors where it will deliver significant climate benefits. However, using hydrogen for daily electricity generation faces significant challenges due to the low round-trip efficiency and correspondingly high costs. For instance, producing green hydrogen from renewable electricity and then converting it back to electricity later wastes 75% of the original energy. Additionally, generating hydrogen from natural gas, even with high carbon capture rates and strict methane emissions control, only achieves a 50% emissions reduction compared to unabated natural gas power plants. Furthermore, there are significant costs associated with hydrogen infrastructure requirements that would contribute to the total carbon abatement costs. By contrast, hydrogen might play a more useful role specifically as a form of long-duration energy storage for the power sector. This application can help balance supply and demand over longer periods of seasons or years, supporting the integration of intermittent renewable energy sources.
Energy Storage:
Energy storage technologies will play a critical role in addressing the challenges posed by increased renewables penetration into the power system. Beyond Li-ion batteries, which are limited to a few hours’ worth of storage, the available storage technologies are very diverse, ranging from electrochemical (e.g. redox flow), to thermal, mechanical (e.g. pumped hydro), and chemical (e.g. hydrogen). This diversity and the technologies’ unique respective characteristics are crucial to fully cover the multi-faceted needs of grids, from intra-day storage (e.g. day/night cycles with solar) to longer durations of days, weeks, and seasons (e.g. the dreaded “Dunkelflaute”, long periods of low wind and solar). There is no one-size-fits-all technology here.
To incentivize the development and deployment of energy storage, it is essential to create market demand and develop innovative financial models that reward investment and de-risk projects. Strong policy support and a combination of public and private funding are necessary to ensure the economic viability of mid to long-duration energy storage solutions.
Investing in R&D is crucial for advancing technology innovations such as high-temperature thermal storage. These innovations require further investment to achieve high technology readiness level (TRL) and increase market penetration. Continued R&D, supported by cross-border collaborations, is essential for advancing these innovative solutions and ensuring their successful integration into the energy market.
Thermal energy storage can unlock cost-effective decarbonization potential for the industrial sector’s heat demand. Energy stored as heat can be converted back into electricity, or used in hightemperature processes, delivering high-energy density and efficiency. Examples of thermal storage materials include molten salts, rock, graphite, and silicon. To fully benefit from thermal energy storage in industrial applications, challenges such as commercial scaling of prototypes need to be addressed.
Future Energy Systems
Key takeaways
The energy transition requires more than just increasing renewable energy generation; it needs enhancing flexibility within the power system
