Energy Transition & Achieving Net Zero Greenhouse Gas Emissions by 2050: Part 1 

“Net Zero” refers to achieving “Net Zero Greenhouse Gas Emissions,” a term widely used across various industries. It is closely associated with “Climate Change,” making the two inseparables. Niphat Tantitsilapanon, a consultant at Sasin Management Consulting, Sasin Graduate Institute of Business Administration, Chulalongkorn University, provides an overview of Climate Change and Net Zero, explaining the context and the necessity of the Energy Transition to achieve the Net Zero 2050 goal. 

Climate Change and Net Zero 

Due to global warming and natural disasters affecting various regions, such as the rapid melting of polar ice caps causing rising sea levels and erratic weather patterns (more rain in some areas, severe drought in others), the world’s agricultural productivity is significantly impacted. These issues are global, and nations have come together to find solutions through three key mechanisms under the United Nations framework: 

1. The United Nations Framework Convention on Climate Change (UNFCCC) – Established in 1992, its primary objective is to stabilize greenhouse gas concentrations in the atmosphere at levels that are not harmful to the climate system. 
2. The Kyoto Protocol (1997) – The first international treaty to legally bind developed countries to reduce greenhouse gas emissions. The protocol established mechanisms like Emission Trading and led to the creation of the carbon market. However, it was limited as it only applied to developed countries, excluding developing nations like China and India. 
3. The Paris Agreement (2015) – Born from the 2015 Paris climate conference, this agreement recognized the limitations of the Kyoto Protocol and introduced a more flexible, comprehensive approach, with 196-member countries setting Nationally Determined Contributions (NDCs). The agreement aims to limit global temperature rise to well below 2°C above pre-industrial levels, with efforts to limit the increase to 1.5°C. 

In 2022, global carbon dioxide emissions reached 38.5 GtCO2, and when accounting for all greenhouse gases, the total was 53.8 GtCO2e. These emissions include carbon dioxide (CO2), methane (CH4), and nitrous oxide (N2O). 

Energy Transition Trends 

To achieve Net Zero by 2050, global energy consumption must shift away from fossil fuels and transition to renewable energy sources, such as solar, wind, and electrification across various sectors. Key developments are also needed in infrastructure, especially electricity grids, to support this transition. Niphat summarizes the energy transition into six key trends, covering three of them in this article and the remaining three in the next installment. 

1. Renewable Energy Expansion 

Currently, more than 61% of global electricity production comes from fossil fuels, such as oil, coal, and natural gas. In 2023, solar and wind energy, as renewable sources, experienced the fastest growth. The advantage of renewable energy is its cleanliness, as it produces no carbon dioxide or greenhouse gases during operation. 

In developed countries, supported by government policies, the Levelized Cost of Electricity (LCOE) from renewables has dropped to levels comparable to traditional energy sources. It is projected that by 2050, solar and wind will contribute 25% and 14%, respectively, to the global primary energy mix, with fossil fuels contributing 30%, nuclear 14%, and other renewables 17%. 

Despite rapid growth in renewable energy, the development has been mostly concentrated in developed nations with sufficient resources and financial capacity (except for China, which, despite being a developing nation, leads the world in renewable energy installation). In developing nations, fossil fuels will continue to dominate due to their affordability and reliability, even though renewable energy’s LCOE has become competitive. The intermittency of renewable energy sources (e.g., solar power only works when the sun shines and wind power when the wind blows) remains a barrier to wider adoption. 

2. Hydrogen as a Clean Energy Carrier 

Hydrogen is considered a clean energy source because when it burns, it only produces water vapor, making it a potential tool for reducing greenhouse gas emissions. Hydrogen also holds almost three times the energy of oil per unit weight (120 MJ/kg for hydrogen compared to 44 MJ/kg for oil). 

Hydrogen is abundant and can be produced from various sources, with three key types of hydrogen: 

• Grey Hydrogen: Currently the most widely used commercially, produced through Steam Methane Reforming (SMR) using natural gas, but it releases CO2 into the atmosphere as a byproduct. It is the cheapest hydrogen to produce (around $2.13/kg). 
• Blue Hydrogen: Produced the same way as grey hydrogen, but with carbon capture technology to sequester the CO2 emissions. It is more expensive than grey hydrogen, costing around $3.10/kg due to additional carbon capture and storage (CCS) costs. 
• Green Hydrogen: Produced using water as the raw material through electrolysis powered by renewable energy sources. This method is the cleanest, emitting no greenhouse gases, but also the most expensive, costing around $6.40/kg. 

Green hydrogen is essential in decarbonizing hard-to-abate sectors like steel manufacturing, ammonia production, and aviation: 

• Steel Industry: Steel production accounts for 7% of global greenhouse gas emissions (3.7 GtCO2e in 2023). Replacing natural gas with green hydrogen could significantly reduce emissions but increase production costs. 
• Ammonia Industry: Ammonia production relies on hydrogen, and using grey hydrogen results in about 0.45 GtCO2 emissions annually. Shifting to green hydrogen would reduce these emissions but increase production costs. 
• Aviation: The aviation industry emits 0.97 GtCO2, or about 3% of global CO2 emissions. Hydrogen could be used to produce Sustainable Aviation Fuel (SAF), which reduces CO2 emissions by at least 80% compared to conventional aviation fuel. 

3. Electrification of Transportation 

In 2023, the transportation sector emitted 8.0 GtCO2, or about 21% of global emissions, with 76% of these emissions coming from road transport, primarily due to the combustion of fossil fuels in internal combustion engines. 

To decarbonize transportation, the transition to green electricity is crucial. This can be achieved through the adoption of electric vehicles (EVs) or fuel cell electric vehicles (FCEVs). EVs are already widely accepted in countries like Norway, China, and many European nations. 

Key factors for the widespread adoption of EVs include sufficient charging infrastructure, improved battery technology (which affects vehicle range and charging speed), and competitive vehicle pricing. 

The three energy transition trends outlined above directly contribute to reducing global CO2 emissions across three major sectors: energy, industry, and transportation, which together accounted for more than 91% of global CO2 emissions in 2022. In the next article, Niphat will explore three more important trends in the energy transition that will help push us toward achieving Net Zero by 2050 and answer whether the world can meet this goal. 

[1] Data from the Energy Institute – Statistical Review of World Energy
[2] LCOE refers to the cost of electricity produced over the lifespan of a power plant, divided by the total electricity produced.
[3] Includes biomass, hydro, and geothermal energy, etc.   
[4] Data from the US Department of Energy   
[5] Data from Bloomberg NEF, 2023   
[6] Data from the World Economic Forum
[7] Data from EnergyNews.biz   
[8] Data from McKinsey & Company   
[9] CO2 emissions in 2022 amounted to 38.1 GtCO2   

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