Environmental, Social and Governance (ESG) is currently centre stage for Corporates at Board level driven by Investor and Societal pressures; we expect these pressures to continue to exponentially increase through time given the urgency to save our planet from the adverse effects of climate change. We are seeing more evidence of actions to enable Net Zero emissions, indeed in preference to carbon neutrality, and these non-financial factors are becoming a significant investor lens in discriminating investor decision making.

In the 1998 Kyoto Protocol[1] to the United Nations Framework Convention on Climate Change, “Greenhouse Gas (GHG) emissions” include Carbon Dioxide, Methane, Nitrous Oxide, Hydroflourocarbons, Perflourocarbons and Sulphur Hexaflouride.  However, these are generally expressed as Carbon Dioxide Equivalent (CO2e) accounting, to be representative of GHG in the Kyoto Protocol. Corporates express emissions as Scope 1, 2 or 3.  Scope 1 emissions refer to the direct emissions of a company (e.g. the operation of boilers, vehicles); scope 2 emissions refer to the indirect emissions (e.g. electricity supplied by others on its behalf); and scope 3 refer to emissions both up and down the value chain. Scope 1 and 2 tend to be more easily defined and managed, whereas Scope 3 emissions tend to be the largest, also most challenging, to define and manage.  It is the category that can make a material difference to achieving true net zero.

What is the difference between Carbon Neutrality and Net Zero, and which is more impactful for our planet?

Carbon Neutrality refers to organisations choosing to neutralise their Scope 1 and 2 emissions through carbon offsetting; that is, they buy carbon reduction, removal or sequestration anywhere in the world and measure this through carbon offset certificates.  This method, however, does not require a reduction in overall GHG emissions of the companies’ own operations.

Net Zero emissions, on the other hand, tends to be comprised of a more challenging series of actions that removes all Scope 1 and 2 emissions and some Scope 3 emissions by 2050. Residual emissions also need to be addressed. This way, therefore, results in a real reduction in overall GHG emissions and embraces the spirit of Net Zero.

Both approaches become a part of business strategy and plans.  The challenge, however, with GHG emissions reductions is decarbonising difficult loads. Electrification is planned to meet 75% of consumption, whereas the rest needs high calorie fuel, and these are often associated with substantial carbon emissions.  The near-term horizon shows that many of the existing Combined Heat and Power and Combined Cooling and Power schemes will have a carbon intensity that will be worse than the average carbon intensity of grid supplied electricity. That is a material carbon stranding problem indeed.

Many applications in both industry and transportation are also difficult to electrify and decarbonise. Difficult loads in the transportation sector include aviation, heavy vehicles, marine and rail.  Difficult loads in the industrial sector include steel, cement and chemical production.  High emission industries include metallurgy (iron, steel, aluminium, copper), chemicals (refineries, plastics, fertilisers), non-metallic minerals (cement and lime, ceramics, glass), pulp and paper, textiles and leather, food processing and mining.  Many of these difficult loads could be addressed through using green hydrogen, but it is very expensive with the existing technology and business models we see today.

Enoda’s HERA® technology can help to drive down Scope 1, 2 and 3 emissions across industries, including the difficult loads identified above; therefore, the technology is capable of truly driving Net Zero outcomes in our lifetime.

For Scope 1 emissions Enoda’s HERA® microgrid solution can directly replace the gas turbine or engine in a CHP scheme and/ or grid electricity supply and onsite boilers and/ or chillers.  HERA® can cater for hot water, heat and / or steam and/ or cooling through dual fuel gas turbines or dual fuel gas engines which have the flexibility to run on either grid natural gas or green hydrogen. Green hydrogen is produced by using excess power of wind and solar farms, when supply outstrips demand, to convert water into green hydrogen.  This can then be used onsite in HERA®’s turbines/ engines and/ or green hydrogen local offtakes for further decarbonisation.  As just one example, excess green hydrogen production from the Enoda HERA® process can be stored and used locally to power associated green hydrogen vehicle fleets.  Where HERA® is different is the price point at which we can make green hydrogen available. As the green hydrogen is used at the point of demand, it removes a layer of expensive transportation cost. Furthermore, a HERA® installation can provide a full range of balancing services to the grid.  As HERA® also materially lowers the electricity losses in the system this has the additional benefit of dramatically reducing the cost of the electricity input for the production of green hydrogen, and in turn, reducing the green hydrogen price point.

As HERA® is configured from the onset to include redundancy. Enoda’s design philosophy can also minimise outages related to power and/ or heat and/ or cooling, saving companies the material related opportunity cost. For Scope 2 emissions, these are minimised by optimising the design sizing to reduce reliance on potentially higher CO2e third party commodity supplies of power and hydrogen or alternative fuels.

As well as Scope 1 and 2 emissions, HERA® can also be a solution for the more challenging Scope 3 emissions through deployment across the value chain.  Going beyond Carbon Neutrality, Enoda provides a real solution for an organisation to own an actionable pathway resulting in achieving truly Net Zero emissions.  Enoda’s innovative technology is available to solve for Net Zero in industry at large, and importantly, able to solve for the difficult loads that have proven unsurmountable until now.

[1] Kyoto Protocol, 1998, https://unfccc.int/resource/docs/convkp/kpeng.pdf