Why Are Major Credible Organizations Like ICCT, SBTi & IMO Getting Energy Demand Wrong?
The SBTi recognizes that different segments of the maritime industry (see more below on sector segmentation) may grow at different rates.
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Why Are Major Credible Organizations Like ICCT, SBTi & IMO Getting Energy Demand Wrong?
8 hours agoMichael Barnard11 Comments
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The International Council on Clean Transportation (ICCT), the Science Based Targets initiative (SBTi), the International Maritime Organization (IMO) and others share a common affliction, a belief that some demand segments are going to increase as they have for the past 30 years. As a result, their analyses are skewed.
Let’s start with the ICCT. They are an almost quarter century old Washington, DC headquartered think tank founded with good intentions and untainted money to focus on climate action in transportation, more than not. In the past few weeks, I’ve looked closely at their trucking, shipping and aviation analyses and found that they were deeply flawed. The trucking material put multiple thumbs on the scale for hydrogen, didn’t list the thumbs clearly in the same place, defended the thumbs as reasonable and required, and then quietly changed their conclusions and report to show the reality, that hydrogen trucking’s total cost of ownership was vastly more expensive than battery electric in every category.
Their maritime shipping material leans into liquid hydrogen which almost no major shipping concern is considering, lowballs its cost with a really basic mistake ignoring balance of plant and liquification costs, and adds rigid sails which are a rounding error technology, even putting them on vessel types that clearly aren’t appropriate for them. Their aviation material ignores center of gravity balancing of aircraft, civil passenger aircraft certification and battery energy density improvements to find that liquid hydrogen would be a great choice for the sector.
I traced their reports back to 2018, where they found that actually green hydrogen would be far too expensive as a transportation fuel, and then forward again through reports where they accepted obviously wrong projections of massive growth of transportation demand while simultaneously ignoring electrification’s role in massively reducing liquid fuel requirements.
The massive growth is due to accepting industry projections of continued compounded annual growth rates, something that the industry needs in order to have stock prices that aren’t plummeting and annoying their shareholders. Growth rates for aviation from IATA, Boeing and the ilk are clearly self serving and clearly wrong. Growth rate projections from ground vehicle fuel suppliers and internal combustion engine manufactures are clearly self serving and clearly wrong.
And on electrification, the ICCT has a bunch of molecules for energy types who just don’t grok electrochemistry and the radical improvements in battery energy density that are already commercialized , never mind the ones that are commercializing today. Vastly greater demand for energy and ignoring the biggest wedge in reducing the need for fuel will lead to absurd amounts of fuel requirements. That in turn leads to unnatural acts on the part of the ICCT, like finding that biofuels couldn’t possibly meet the actual demand, that electrification wouldn’t reduce demand and hence that green hydrogen must by definition be required.
Are they alone? No. Enter the Science Based Targets initiative. That ‘science based’ is comforting, isn’t it. But science doesn’t do transportation tonnage projections. What does the SBTi say demand increases in shipping will be? Let’s look at the primary diagram that represents their data curves.
Notice anything strange about this? No?
Let’s start with tankers, one of the thickest segments. What do most tankers carry? Oil and natural gas. Is there any scenario in which oil and natural gas tonnages don’t plunge and climate change is addressed? No. The vast majority of tankers are going away over the next 30 years, not massively increasing in number and range.
What about bulkers, the thickest segment, which is differentiated by being dry bulks and shown as increasingly radically. Well, a huge percentage of that is coal. Is there any world in which coal shipping increases and climate targets are met? No.
Similarly, a large percentage of dry bulks are raw iron ore, mostly steaming to the same ports as bulk ships carrying coal. Those days are ending for four reasons. The first is that we have figured out how to reduce iron ore into iron and then make steel without coal, requiring methane which can come from biological sources, green hydrogen or even green electricity.The second is that China’s massive infrastructure boom is coming to an end, and with it their massive steel demand growth. Other markets for steel are growing much more slowly. Third, we’re scrapping increasing amounts of steel for new steel demand, with the USA at 70% already and that’s just going to increase. Finally, increased shipping costs with increased fuel costs for lower carbon energy are going to make more local processing more economically viable.
A full 40% of bulks and tankers are oil and gas. A full 15% of the combination is raw iron ore. Those tonnages are declining rapidly in the coming years, not rising. When 55% of the tonnage is in decline, the total tonnage isn’t going to be shooting up.
Why did SBTi get this so wrong?
The SBTi recognizes that different segments of the maritime industry (see more below on sector segmentation) may grow at different rates. For example, decarbonization across the entire global economy may be associated with reduced demand for oil transportation at the same time that increased global populations may be associated with increased demand for containerized cargo transportation. Therefore, assuming uniform growth across all segments of the maritime industry may lead to outputs from the maritime tool that are biased for or against certain segments of the maritime sector. While projecting transport demand at a segment-specific level could address this issue, the resources required to calculate these projections – and the host of assumptions that would need to be made to create robust and credible segment-specific demand projections – preclude the use of segment-specific demand projections at this time.
This translates to “It’s hard, we know it’s wrong, we can’t find shipping sources willing to give us better numbers and we aren’t going to stick our necks out.”