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1/ I learned an interesting fact about Green Premiums in hydrogen supply chains today:
The premium on a car made from green steel made from green hydrogen would add 3-5% to the original price or around €600 per car. [calcs below]
The premium on a car made from green steel made from green hydrogen would add 3-5% to the original price or around €600 per car. [calcs below]
2/ Spread across a 5-yr loan, this adds €12 to a monthly repayment.
For reference, an add-on package including parking sensors, automatic AC, radio, GPS, and cruise control adds €4,000 to the price of a car.
According to Google anyway. I don't have a car.
For reference, an add-on package including parking sensors, automatic AC, radio, GPS, and cruise control adds €4,000 to the price of a car.
According to Google anyway. I don't have a car.
3/ Assumptions:
• Grey steel = €600 per tonne
• Green (H2-DRI) steel = €1300 per tonne
• Green steel premium = €700 per tonne
• 0.9 tonne steel per car
--> green car premium = 0.9 x 700 = €630 per car or 3.2% of a €20k car
Source: https://www.mdpi.com/1996-1073/13/15/3840
• Grey steel = €600 per tonne
• Green (H2-DRI) steel = €1300 per tonne
• Green steel premium = €700 per tonne
• 0.9 tonne steel per car
--> green car premium = 0.9 x 700 = €630 per car or 3.2% of a €20k car
Source: https://www.mdpi.com/1996-1073/13/15/3840
4/ There is clearly more to greening a car than changing the colour of steel. But this simple estimation shows the effect complex supply chains can have on green premiums.
I'm curious to know how much more an iPhone would cost if made using only renewable chemicals / materials.
I'm curious to know how much more an iPhone would cost if made using only renewable chemicals / materials.
5/ My guess: not a lot more.
This is why I think renewable H2 and decarbonisation technologies more broadly are less reliant on subsidies than some people eagerly claim and others cautiously fear.
Can we adopt a divide and conquer approach to financing green premiums?
This is why I think renewable H2 and decarbonisation technologies more broadly are less reliant on subsidies than some people eagerly claim and others cautiously fear.
Can we adopt a divide and conquer approach to financing green premiums?
6/ Find out where in a supply chain green premiums are lowest and where the value of green products is highest. In most sectors this will be (near) the end-user.
Companies or early adopters most willing-to-pay for green products can do so. That's your anchor off-taker secured.
Companies or early adopters most willing-to-pay for green products can do so. That's your anchor off-taker secured.
7/ Work your way back up the supply chain + draw on guaranteed financing and off-takes to re-invest in technology, develop more projects, create new markets, and reduce green premiums for everyone.
8/ Moving our immense energy economy from carbon-emitting tech to ones with zero emissions will cost something. But with the right level of consumer education, and if companies and consumers work together - we may be able to create new markets to pay for this, today.
