Category: New Energies

The Bridge Tank participates the 2021 edition of the Summit of Minds

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The 2021 edition of the Summit of Minds forum took place at Chamonix, from the 17 – 19th of September. This year, the Summit was focused on two main ideas: key macro issues and wellness and wellbeing, with a particular spotlight on natural capital (nature as a productive asset). In a context where the climate crisis is becoming a more and more central concern initiating many high-level discussions, the Summit of Minds gathered prominent political, economic, scientific, cultural, and business figures from all over the world, including the Armenian president Armen Sarkissian, to debate these key topics.

The Bridge Tank’s president, Joël Ruet, intervened on the panel: ‘Energy Transition (2) – How to Invest in it? dedicated to the current trend of transition towards net zero carbon emissions, its subsequent opportunities, and risks for businesses. Led by Nik Gowing, Managing Partner of Thinking the Unthinkable, UK, the discussion was structured around three essential questions: 

  1. Where is the ‘smart’ money going?
  2. Is the current ESG excitement sustainable?
  3. What assets run the risk of becoming stranded?

During his intervention, Joël Ruet elaborated on the evolution fo classes of assets for energy transition finance, highlighting the diverse risk factors involved, from profitability dispersion to a lack of cohesion in some national transitions, going through unstabilised hydrogen ecosystems across the world. Joël Ruet also highlighted the importance of differentiating megatrends from mega-ambition, stating that there is no one-size-fits-all energy which could alone resolve current climate issues.

Other panelists included: Martin Fraenkel, Vice Chairman of S&P Global, UK, Eoin Murray, Head of Investments of Federated Hermes International, UK, Franklin Servan-Shreiber, Co-Founder & Chairman of Transmutex, Switzerland, with the special appearance of Mafalda Duarte, CEO of Climate Investment Funds, USA.

Our board member, Pranjal Sharma, was also present during the Summit. He intervened on two panels: ‘AI & Democracy – Do We Have Anything to Fear?’ and ‘Tech – How Far Will Innovation Go?’

During the forum, Joël Ruet also notably exchanged with Lord Adair Turner, chairman of the Energy Transitions Commission, UK on how the COP26 could transform systems of negotiation for future COPS to come, instigating climate change action within the public finance sectors at regional, national and international levels.

Watch the sessions on our youtube channel: 

Sustainable Energy transition trajectories in large countries

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By Baudouin Becker, Antoine Goutaland, Xieshu Wang,  Joël Ruet, Laure Elise Wargnier and Malaurie Le Bail.

The ecological emergency has caused a sharp pressure on policy makers to concentrate their efforts on elaborating public policies to organize the passage from the existing fossil fuels based system, that is unsustainable, to another system, whose contours are unknown in details for the time being, but whose ambition is to be durable. Unlike previous energy transitions that were achieved through industrial investments, the decarbonization of national economies is directly led and orchestrated by public authorities through incentives, constraints and policies. The presented documents are methodologies that aim at assessing the ability of governments to coordinate key actors and systems in order to achieve their climate goals and to identify the structural characteristics of the countries’ ecosystems.

 These studies identify trajectories, that we define as the coordination of variables that allow a system to remain balanced while being in motion. A systemic understanding of these trajectories is proposed, including both major responses of public policies to climate issues and the possible integration of the new technologies within the existing system, including an analysis of industrial systems and their capacity (or disability) to meet these challenges.

 In order to understand energy transitions across sectors, we have developed a detailed and replicable methodology that fully integrates the role and potential impact of actors (political and industrial). This has enabled us to understand energy transitions in an original way, freeing us from siloed macroeconomic studies and overly specific energy studies that do not allow us to understand the energy stakes as a whole.

In the following documents, you will find this methodology applied to over 20 economies.

The full report : Energy trajectories in main markets

Specific focus : Energy trajectories in main markets

The making of Hydrogen – Definition and acceleration of a sector

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By Joël Ruet, Baudouin Becker, Antoine Goutaland and Xieshu Wang.

Hydrogen is a subject in trend and announcements of breakthrough hydrogen technologies have been multiplying in the last couple months. Indeed, it seems hydrogen, as an energy vector similar to electricity, has imposed itself in most government’s eyes as an indispensable tool in order to transition to climate neutral economies by the end of 2050. Indeed, a number of executive bodies have published hydrogen national strategies in the last 15 months, among which notably the EU, the US, France, the Uk, Germany, and many others (even if mostly Europeans so far).  

            Hydrogen is not a new molecule and has been known and used for decades. Currently, it is mostly utilized as an industrial composite for the production of ammonia, of steel or for refining oil. However, in the context of the energy transition, it is mostly considered useful as an energy vector that would complement electricity. Indeed, in hard-to-abate sectors, meaning sectors where electricity isn’t a solution or an unsatisfactory one, hydrogen appears as a viable replacement to fossil fuels, for example in long-distance transport or shipping where oil is hard to substitute.  

These two documents provide an overview of hydrogen developments and increasing importance in the energy transition as well as a prospective analysis of its prospects of evolution towards 2030. It notably identifies an unexpectedly faster pace of development of the molecule. Country that are mostly likely or unlikely to decarbonize their current hydrogen production are also identified. Finally, the documents provide a specific lens on hydrogen use for mobility and on hydrogen ecosystems.

 

Main report : Main Report – The making of Hydrogen – Definition and acceleration of a sector over 2017-2021

Executive summary : Executive Summary – The making of Hydrogen – Definition and acceleration of a sector over 2017-2021

The current state of the hydrogen ecosystems in the world

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By Florian Dommergues and Joël Ruet

Retrospectively, 2021 might well prove to be the breakthrough year for the ecological transition towards climate neutral societies. With the election of Joe Biden, who reinstated the United States in the Paris Agreement hours after coming into office, the ecological transition has gained new momentum.
By the end of 2020, more than 110 countries had pledged to reach climate neutrality by the mid-century, including China by 2060. Moreover, the COVID-19 pandemic has induced an important economic crisis which in response has required the launch of large-scale recovery plans by OECD countries, such as Biden’s $1.9 trillion American Rescue plan, France’s €100 billion recovery plan (of which €30 billion are dedicated to the ecological transition), or the EU’s €1800 billion plan, of which one third is dedicated to the European Green Deal to reach climate neutrality. These plans have been seen as a chance to accelerate further the ecological transition and to invest in the technologies and energies of tomorrow.

In this context, one energy in particular gained particular drive and importance : hydrogen (H2). The aim of this policy brief is therefore to provide an overarching view of the current state of affairs of the hydrogen ecosystem and a review of the existing literature.

We argue that three trends required special attention and allow to have a structured analysis of the field.
First, hydrogen must be approached around the industrial problematics that compose the ecosystems that are emerging around the molecule. One of the decisive dynamic being the interaction between industrial players (both new upcoming players and old industrial fossil fuel players, such as gas utilities) and government public policies which will shape the regulatory environment.
Second, hydrogen in the years to come, will most probably become an object of trade between countries with abundant RES and those with scarcer ones in the years to come. If we analyse these dynamics that notably take the form of bilateral partnerships between states, we argue that for a long time to come hydrogen exports will not take the magnitude nor the forms of standardized transactions, such as oil or natural gas. Indeed, hydrogen cannot be understood as a uniformed commodity, as we stated in a previous policy brief (in french).
Third, the place of green hydrogen in the energy transition must be considered lucidly, what we call a « philosophy of transition ». Hydrogen, if an essential tool of the energy transition, will remain second whenever electrification is possible. It must be considered first and foremost in order to decarbonize industrial uses of hydrogen, then in hard-to-abate sectors and finally as a tool for system integration (providing grid stability and allowing sector coupling).

You can find the full brief here : The current state of play of the hydrogen ecosystems in the world

China’s policy on strategic materials – impact on the batteries ecosystem and industry recommendations

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By Xieshu Wang and Joël Ruet.

Strategic materials, such as rare earth, lithium, cobalt or nickel, are indispensable inputs for green transition technologies such as wind turbines or batteries for electric vehicles. With more and more governments aiming to reach climate neutrality by 2050 and as the necessity to transition to sustainable economies is becoming more and more pressing, primary materials’ demand will rise and they are therefore considered critical inputs, or strategic materials. It is expected that consumptions of strategic metals will increase from 7 to 19 billion tons per year, inducing serious tensions on the supply side. Cobalt is one of these metals used as an input in the magnets of wind turbines, and for the production of the cathodes of lithium-ion and nickel metal hybride batteries.

As China quickly understood the importance of the metal for future strategic technologies, it positioned itself early on the cobalt value chain and has therefore been able to control a significant part of the chain, mostly by controlling a large portion of the DRC’s cobalt ressources.

This document provides an analysis of China’s materials strategy, the way it has managed to gain a privileged position on the value chain,  as well as an analysis of the key private actors that are major players on the cobalt value chain.

Industry recommendations : Industry Recommendations – China’s key materials strategy

Analytical report : Analytical Report – China’s key materials strategy

Policy Brief – Hydrogen, a new commodity, a ‘magic’ energy carrier, or a prescriber of demanding public policies?

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By Antoine Goutaland and Joël Ruet

“Hydrogen” is seeing its industrial and energy uses differ while its synthesis processes abound. But in reality, there are hydrogens whose promoters constitute a heterogeneous club with more or less convergent interests, present at different geographical, sectoral and temporal levels. A unified and stabilised ecosystem does not exist at this stage, and due to the characteristics of the molecule, we defend that this unique and global ecosystem will not be emerge.

Green hydrogen remains a decisive tool for the energy transition. It has the capacity to better store, use, and valorise renewables, and, more generally, offers an additional flexibility option to the great energy systemic overhaul necessary for the ecological transition.

At present, the World Hydrogen Council has an interest in showing a united front to policy makers, in order to broaden the base of what has not, so far, really been a “sector”. But behind this homogeneous ‘narrative’, industrial and political battles are being fought.

Hydrogen will contribute to the slow change in perspective of ecology: in parallel with the systemic question of transitions and trajectories, there will be a return, not of the micro-economic question (price formation on markets), but rather of the macro-economic policy of natural resources, an all-encompassing problem, going from a national accounting of resources to a geostrategy of resources.

Read the Full Brief (in French): 2021-07-07-PB_Hydrogene

 

Key points

  • Hydrogen is not a commodity and will probably not become one. However, this by-product can play a key role in the decarbonization of certain heavy industries or energy uses.
  • Hydrogen is not oil, therefore the previous economic model of this sector is not necessarily adapted to hydrogen. It is consequently necessary to question the assumptions and cognitive habits acquired, as well as to objectively analyse the accelerators at hand, and in particular the territories, that are determining factors.
  • Hydrogen opens the Pandora’s box of the industrial economy: are forced technological oligopolies coming? Will they overlap or will they transcend geopolitical competition? Will certain coal basins impose themselves by a sort of return of history? Will industrial parks turn demand to their advantage?
  • The electrification of the world, mobilizing hydrogen, and associated with “natural” uses of hydrogen where electrification is not relevant, is compatible with an explosion of energy transformations, alongside a decrease in CO2 emi

4th Nanjing/Paris Forum on innovation: towards state-regulated technological partnerships?

Posted on by Joël Ruet

On Thursday the 24th of June 2021, the Nanjing/Paris Innovation Partnership and the 4th Sino-French Innovation Cooperation Conference was held in Nanjing, China within the context of Nanjing Techweek 2021. The forum aims at deepening strategic partnerships between China and France through the cities of Nanjing and Paris, with a particular emphasis on scientific and technological innovation and development.

Attended by hundreds in person and broadcast live online, the Nanjing/Paris forum hosted notable guests from both China and France. On the Chinese side, speakers included: Li Shigui, Member of the Standing Committee of the Municipal Party Committee, Deputy Director of the Standing Committee of the Municipal People’s Congress and Secretary of the Jiangning District Party Committee and Shen Xiang, Minister of Economic and Commercial Affairs of the Chinese Embassy in France and Lu Qingjiang, Consul General of the Chinese Consulate General in Lyon.

On the French side, Dominique Villepin, minister of foreign affairs, outlined the importance of maintaining and developing this relation in order to further develop the energy, scientific and technology sectors within France, such as the recent development of French Chinese entrepreneurial clubs supported by the municipality of Nanjing. De Villepin was accompanied by the economist Pascal Petit, Director of the French National Center for Scientific Research who spoke on the necessity of a more opened policy with regards to innovation of new models between the two countries, and by Joël Ruet, president of The Bridge Tank.

Our president, Joël Ruet, also spoke at the event, elaborating on three main points:  

– first, drawing the lessons from the history of technological cooperation between China and France, particularly within nuclear and energy sectors, today ending their cycles,

– second, the need to build on these past cooperation’s through the expansion of research frontiers and dialogue, for instance on fast breeding nuclear reactors or urban environmental services,

– third, focusing on new energies like hydrogen, which would be highly beneficial for France’s technology systems and industry.

Joël Ruet put his speech in the context of growing technological rivalries, arguing that both parties should clearly delineate those technologies where open cooperation is possible from those that ought to be regulated by strict state protocols.

　In the subsequent remote interaction session between the Paris session and Nanjing Sino-French Collaborative Innovation Center, more than ten Chinese and French business leaders made corporate presentations and exchanges.

　　An online signing ceremony of Sino-French technology projects and innovation platforms also took place alongside the forum, with keynote speeches by Chinese and French invited guests and a roundtable forum on science and technology innovation.

This forum, bringing together a wide range of experts in varying fields, from economics to technology, finance and academia, adopted a “cloud + offline” model to structure the conference, aims to become a platform of open innovation, cooperation and sharing between France and China, in order to promote mutually beneficial development. The topics touched on over the course of the forum included but were not limited to: automotive, artificial intelligence, medicine and health, energy saving and environmental protection.

Contradictory trends on EU-China, relations? The case of industry

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The paradoxical observation of deep disagreement and necessary cooperation

Relations between the EU and China are conditioned by a double observation : observation of a deep disagreement on political values, in terms of human rights and democracy, but also observation of the need for the two powers to cooperate on major issues, such as climate, strategic materials or industries of the future.

Such is the Bliken doctrine, with the exception that the US play the confrontational rivalry while the Eu remains more soft spoken.

While the EU is now the largest trading partner and foreign investor in China, a deep and lasting mistrust marks bilateral relations and tends to poison them. Strategic partners and systemic rivals, the EU and China are now reaching a turning point in their relations. Also, the EU must redefine its Chinese policy, between taking an assumed position, pragmatic cooperation, and inevitable negotiations, to get out of the stop and go provoked by these antagonistic tendencies.

Whether it takes the form of a technological, trade or human rights war, a tendency towards confrontation is gaining ground in diplomatic relations between Chinese and Western powers. Rising diplomatic tensions between the EU and China, illustrated by European sanctions over forced labor in Xinjiang province and the subsequent Chinese counter-sanctions, have brought bilateral cooperation to a halt, as demonstrated by the vote of the European Parliament on May 20 in favor of the suspension of negotiations for the ratification of the Agreement on Investment announced in December 2020.

However, the same day, a partnership was announced around battery materials between the German manufacturers BASF and Chinese Shanshan. This twofold topicality testifies to an inconsistency in the European line of conduct towards China. Beyond the apparent incompatibility of the two political systems illustrated by an increasingly less diplomatic tone, a real complementarity of interests between the two parties remains. In fact, the EU and China cannot do without having discussions with each other, if not cooperation, at least an open and pragmatic dialogue on certain issues.

BASF and Shanshan enter into joint venture in battery materials sector

If the light is red in terms of political cooperation with China, Sino-German industrial collaboration is for its part in good shape. The two leaders have embarked on a joint venture serving the Chinese market, the largest in the battery materials sector. For BASF, a leading global supplier of Computer Aided Manufacturing to the automotive industry, this is an opportunity to access the Chinese CAM market, expanding its global footprint with an integrated cathode active materials supply chain and unique. BASF would become the first company to have capacity in all major markets by 2022. For its part, Shanshan, a leading supplier of lithium-ion battery materials serving both the electric mobility market and consumer electronics, would benefit from BASF’s global network of automotive customers to strengthen its competitiveness in the Chinese market.

Thanks to the strong technological and development capabilities with a global footprint of one, and the vast experience of the Chinese market on the other, these two giants, by combining their expertise, will be able to offer incomparable competitiveness in terms of innovation, customer proximity and cost and become one of the world’s leading CAM suppliers. The aim is to generate important technological synergies and accelerate the transformation of the electrification of the transport industry.

The issue of this partnership is central when we consider that China has control over the value chains of strategic materials necessary for the manufacture of batteries, for which it dominates the market and holds around 90% of world production. In addition, China is a key player in the supply chains in key areas of energy transition (solar panels, wind turbines, hydrogen).

What method for a coherent European position?

Between deep political dissension and innovative cooperation on issues of the future, the Sino-European relationship is subject to contradictory trends which seem irreconcilable and prevent the EU from maintaining a unambiguous course of action.

In any case, the Sino-European divorce is not consummated. Beyond the sirens of political rivalries, points of convergence still make it possible today to talk about shared visions of the future. In view of the COP26, it is necessary to establish essential strategic axes towards which to orient Sino-European cooperation. The subject of raw materials, agricultural and mineral, is for example a central point of support for this cooperation, as is the climate or the energy and industrial transition.

The EU will only be able to impose its views if it shows a unanimous and coherent discourse. It should therefore first agree internally on its course of action, then externally by positioning itself according to a flexible method capable of breaking out of permanent stop and go in international relations. Thus, it will be able to hold a precise but firm dialogue in negotiation, redefine demanding and lasting partnerships, respectful of the law, and based on real reciprocity. In short, assume a role of “balancing power”.


The Bridge Tank at the BOAO Forum for Asia 2021: a partnership anchored in a shared vision for the future

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The Bridge Tank at the annual “Chinese Davos” meeting

After a year of pandemic which led to its suspension in 2020, the BOAO Forum renewed its annual conference from April 18 to 21, 2021 in a context fluctuating between resumption of international trade and temptation to withdraw. As such, the “Chinese Davos” plays a decisive role in the international calendar by advocating an open multilateral dialogue, at a time when the Covid19 has lastingly disrupt the international balance and created a series of new challenges while exacerbating those which pre-existed to it.

Since 2018, the chairman of the Bridge Tank Joël RUET has participated to the BOAO Forum, of which the think tank is a partner. As every year, he spoke at a high-level conference alongside international leaders from the political and business worlds, such as Dmytro KULEBA, Ukrainian Minister of Foreign Affairs, Jens ESKELUND, vice-president at the Chamber of European trade in China, or LIU Hualong, president of China Poly Group, but also the director general of the WTO, Ngozi OKONJO-IWEALA, or the South Korean Minister of the Environment.

He was one of the three French speakers, embodying the circle of think tanks, while Jean-Pierre RAFFARIN and Henry GISCARD D’ESTAING, respectively represented the political and economic world. This high-level platform of dialogue, eagerly awaited in the context of a return to international discussions, aspires to build a global consensus and promote common and sustainable development. This meeting was an opportunity to discuss the measures takenby the BRI countries to keep the economic and trade volume roughly stable and normal during the COVID-19 pandemic when the global economy plunged, and cross-border trade and investment slowed down. The role of China-Europe Railway Express in stabilizing the global supply chain was also discussed, as well as the role played by e-commerce in renewing and developing international economic cooperation. In the context of an implementation of the New Silk Roads, but also of an Investment Agreement between the EU and China which is debating, the future of Sino-European relations also occupied the space of discussion.

For Joël Ruet, chairman of the Bridge Tank, “the investment of today makes the business of tomorrow”

In his speech, Joël Ruet stressed the need to optimize Eurasian trade, embodied by the rise of the China-EU Railway Express, by emphasizing the role of upstream investment. As such, it calls for a rebalancing of trade, in favor of exports of European technologies and equipment to China. On this point, the Bridge Tank discussed at length the subject of the EU’s competitive advantages to be brought to bear in its trade with China.

He also addressed the energy issue : the Belt and Road Initiative (BRI) could play an important role in connecting the two hydrogen champions Asia and Europe. The Bridge Tank has also developed several avenues of cooperation in terms of research that it would be strategic to develop between the two regions.

Joël RUET added that the EU did not intend to tackle the climate issue as one subject among others, but as an issue that conditions and prevails over everyone’s interests, and compared this approach to the Blinken line: dealing separately with technological rivalries and coordination for the climate. Joël Ruet said it remains to be seen whether this separation is audible by the Chinese side.

He also reflected on the place of Africa in the Belt and Road Initiative, suggesting that Africa wants and must find its place there. According to him, investments on the African continent, still too limited to infrastructure, would benefit from further enhancing contact between individuals by focusing on human capital and skills training.

Ukrainian Foreign Minister in favor of an ambitious European cooperation on hydrogen

The Ukrainian Foreign Ministry raised the many challenges brought to light by the pandemic. He argues that international trade will play a key role in the global economic recovery, provided cooperation is boosted. To achieve this, and like Ukraine, which is posed as a strategic logistics hub, the regions of the world must enhance their connectivity in order to foster multilateral interactions.

He advocates enhanced European cooperation in the sector of alternative energies such as hydrogen. He therefore calls for coordinated efforts to invest in hydrogen technologies, ensuring that Ukraine intends to play its role as a strategic partner. The Bridge Tank shares with interest the Minister’s enthusiasm for innovative cooperation around hydrogen, as evidenced by these numerous works on the subject.

For Jens Eskelund, Managing Director of Maersk and Vice-President at the European Chamber of Commerce in China, “the business world allows constructive international dialogue beyond politics”

Jens Eskelund spoke about the pre-Investment Agreement between the EU and China, whose ratification has been suspended due to political disputes. For him, this is the dangerous symptom of a phenomenon of politicization of world trade: the political circle meets the business world. However, this situation is untenable in the long term: both parties must be aware of the need to maintain an open dialogue. For him, trade remains the area where constructive and frank links can be maintained regardless of political differences. The business world therefore has a role to play in maintaining contact where diplomatic relations face an impasse.

According to him, and the Bridge Tank totally agrees with him, international cooperation is indeed crucial to meet future challenges such as the climate challenge: on this subject, the EU and China cannot afford to develop technologies in parallel without converging.

LIU Hualong and the importance of working towards a state of trust to rebuild international relations

In a context of tension in diplomatic exchanges, the CEO of Poly Group insisted on a return to a state of trust, a necessary prerequisite for any trade or international investment. According to him, sharing experience and building trust are essential to rebuilding a sustainable post-covid world and stabilizing the global supply chain.

Joël Ruet bounced back from this intervention, emphasizing that constructive relations must be rooted in a state of mutual understanding, fueled by international networks and cultural projects. In fact, for a rapprochement on investment to be made by companies, it is essential to get to know each other, through multicultural initiatives.

The Bridge Tank at the BOAO Forum : to go further

If the Bridge Tank has been a faithful partner of the BOAO Forum since 2018, it is because it works to offer a vision of the world converging with the vision shared at BOAO, in favor of openness and cooperation. The interviews suggested below, given by Joël Ruet to Chinese media, allow us to deepen the meaning of this shared vision.

During an interview with CGTN TV, Joël Ruet proposed avenues for reflection on environmental cooperation between China, the European Union and the United States. He also mentioned the need to strengthen coordination between the G20 and the BRI and addressed the issue of governance of these new Silk Roads to these journalists.

Joël Ruet was quoted by CCTV13, a Chinese national news channel, about the role of BOAO in the economic integration of Asia, but also of the world on a global scale.
 
In an interview with Xinhua news on the occasion of the opening of the Forum, the president of the Bridge Tank presented his point of view on the trade of tomorrow, necessarily based on proactive and ambitious investments, a reform of the WTO, and the greening of the New Silk Roads. Quoted in an article of Xinhua news on the place of China in sustainable development on a global scale, Joël Ruet argued that the BRI has a big role to play in the energy transition, in particular in the field of hydrogen.
 
To find all the media resources of the Bridge Tank about this 2021 Edition of the BOAO Forum : (insert link of the short post).
 

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