For multinational corporations with significant emissions, carbon trading has become a valuable tool in balancing business needs and environmental responsibility. As prices increase, so too does pressure to cut emissions. Permit prices under the EU UTS, which is linked to Switzerland’s own Emissions Trading System (ETS), increased by EUR 8.90 per tonne of CO2 between 2018 and 2019. At the same time, total emissions fell by 8.9%. CO2 price development is an important push factor in encouraging corporates to reduce their carbon footprint. The question is: how else can we make decarbonization more attractive on a wider scale?
One issue is that the negative environmental impact of fossil fuels is not yet reflected in the price. Green taxes could help steer both corporate and private consumers toward renewable energy as a key driver of decarbonization. As decarbonization efforts accelerate, though, it’s becoming clear that a multi-pronged approach will be needed to decarbonize all sectors. While electrification has gone mainstream in recent years, with electric vehicles perhaps the most visible example of transformation, it’s not feasible for all industries. That’s why many are pinning their hopes on hydrogen.
If produced appropriately, H2 is a clean and versatile energy carrier, which has a significant potential to reduce greenhouse gas emissions in hard-to-decarbonize sectors of the global energy system. It can be used directly in various applications, but also offers exciting potential to improve the stability of the overall power supply alongside renewable energies thanks to its high storage capacity and transportability.
Even though applications using hydrogen technology produce zero end-point emissions, how “green” hydrogen is depends on how it’s made. Generally, we distinguish between three “shades” of H2. In an article , EY-Parthenon Partner Giacomo Chiavari explored the role of green hydrogen in global decarbonization, and explained the shades as follows: