Hydrogen, CCS and nuclear technologies: why There Is No Alternative

TINA is not just a name: it is a slogan and an investment strategy. There Is No Alternative (TINA) is a guide when the options before us look unappetising but necessary. And the same applies to energy technologies, particularly the unloved quartet of nuclear power, carbon capture and storage (CCS), carbon dioxide removal, and hydrogen.

These technologies have suffered a bad month. On June 3, the US Department of Energy cut 74% of the budget for innovative clean energy technologies, wiping out most of $3.46 billion committed. Staffing suffered a fate worse than decimation: 200 people become 10. This looks set to impact multiple CCS and hydrogen projects, and the Office of Nuclear Energy sees a 24% cut.

A Mammoth challenge

In May, a Swiss-based carbon dioxide removal start-up, one of the sector’s early front-runners, announced that it would lay off about a tenth of its workforce as it faced financial challenges. Reporters in Iceland, where the company operates two plants, said that it captured only a small fraction of the carbon dioxide it promised: 105 tonnes from its Mammoth plant’s first year of operations, versus 36,000 tonnes of capacity.

The largest hydrogen company in the world, Air Products, lost its CEO in February after investor discontent over the company’s direction. His replacement told the recent Q2 earnings call that the company would return to its core business in industrial gases. Air Products is one of the lead partners in the green hydrogen at Neom in Saudi Arabia, a trailblazer for the fuel, which is struggling to find committed buyers for its output.

Hydrogen regulation in Europe

Europe’s absurdly prescriptive regulation of hydrogen, intended to ensure it is truly low carbon, make it virtually impossible to produce economically, killing an industry before it is even born. Even in state-directed, coal-heavy China, CCS is struggling to move beyond its use by the three major national oil companies to enhance oil recovery.

Environmentalists have never liked these technologies. They see them as prolonging the life of the enemy – the fossil fuel and nuclear industries – or as giving a licence to pollute now, with the false promise of cleaning up the atmosphere later.

They point to the undoubted success of solar and wind power, batteries and electric cars to suggest that an electrified, all-renewable world is not just possible, but the best solution to the problem of climate change. Green hydrogen and carbon capture are said to be “too expensive”.

False dichotomy

But this is a false dichotomy. CCS, carbon dioxide removal, hydrogen and nuclear power aren’t rivals to renewables: they are essential complements. This is where TINA comes in: if Europe, Japan and elsewhere are serious about their net-zero carbon targets, these unfavoured four technologies are essential.

Crucial role of hydrogen

Yes, after some dabbling, hydrogen probably does not have a part to play in cars or home heating. But crucial industrial materials such as iron and steel, cement, methanol and fertilisers release carbon dioxide as an unavoidable part of manufacture. Renewables, electrification, solar heating, novel materials, new processes can reduce industrial emissions – but full decarbonisation needs CCS and hydrogen.

Long-range transport – ships and planes – cannot manage on batteries, even with major continuing improvements in weight. Biofuels are too limited in quantity, and damaging to ecosystems. Hydrogen-based fuels, or on-board carbon capture systems for ships, are the obvious solutions.

The case for nuclear energy

Nuclear is perhaps a harder case to make. Solar and wind plus batteries can already provide a high share of electricity demand in many countries. In the West (though not in China, South Korea or the Middle East), nuclear power’s costs are too high, construction timelines too long. But some land-constrained and security-conscious countries, particularly in East Asia, see the benefit of nuclear power.

A portion of nuclear power in an electricity generation mix limits the risk of long periods of unfavourable weather, such as a cold, dark, windless European winter. The recent rush of data centre construction in the US has also spurred renewed interest, and encouraged investment in small modular nuclear reactors. Now the nuclear industry needs to live up to its promises.

Finally, carbon dioxide removal. It will be clear within a year or two, if it isn’t already, that the target of 2015’s Paris Agreement, to limit global warming to no more than 1.5°C by 2100, has already been breached. The limit of 2°C will go by 2045, or perhaps earlier.

Carbon removal ‘unavoidable’

It was foreseen that the burden of past and continuing emissions will require massive removals of carbon dioxide from the atmosphere. The Intergovernmental Panel on Climate Change (IPCC) said in 2022 that CO₂ removal was “unavoidable”, and that between 5 and 16 billion tonnes of annual removals were required by mid-century – compared to about 37.8 billion tonnes of overall emissions last year.

Direct air capture plants today remove 0.01 million tonnes annually. Scaling that up by 500,000 times is indeed a monumental challenge. The idea is to clean up our past mess, not simultaneously to blow carbon dioxide into the atmosphere in one place and suck it out somewhere else.

Investment in these four technologies isn’t detracting from renewables – if anything, the reverse. In 2023, nuclear, hydrogen and CCS received between them $54.5 billion of investment, according to BloombergNEF. Electric vehicles, in contrast, amassed $634 billion; renewables, $623 billion.

Decarbonising the economy

To say that hydrogen or CCS are “too expensive” is to say that decarbonising the economy in the way Europe and many other nations plan is also too expensive. Opponents can wait for a magical technology, or something in a lab today that needs to be a $600 billion industry in a decade’s times. Or, they can get behind unfashionable but viable approaches today. The more boldly we invest in these technologies, the faster they will gain scale and experience so that costs can come down.

Supporting solutions to climate change is not the Champions League: it is possible to cheer for every team. If we want to preserve a liveable climate, There Is No Alternative to an intelligent blend of energy technologies, each in its right place, even the ones that we personally might not like.