Time to retire, ‘hard to change’ as climate solutions become more affordable, ET EnergyWorld

Jargon often gets in the way of a clear understanding of the climate challenge. While some technical terms, such as “net zero,” are useful and gaining wider acceptance, others are not so helpful. Take the phrase “hard to reduce,” for example.

The simplest definition of “difficult to reduce” is that an industry has difficulty reducing its greenhouse gas emissions. Industries for which the term is typically used include steel, cement, chemicals, shipping, aviation, and sometimes long-distance trucking.

However, “difficult” can be interpreted in different ways. It could mean that these industrial sectors do not have the technology to reduce emissions. Or it could mean that the technologies are so expensive that their product would become unprofitable. Or it could mean that, given the lack of regulation, these sectors have difficulty justifying the efforts needed to reduce emissions.

The multiple meanings of the phrase “hard to break” are why experts say there’s a good case for ending its use. “The industry has adopted the term as a way to resist taking action,” says Claire Curry, head of technology, industry and innovation at BloombergNEF.

So far, most of the progress in reducing emissions has come from expanding renewables and switching to electric vehicles, which includes the electricity and transport sectors. That’s a fair starting point, given that a key way to address the climate challenge is to electrify as much as possible and produce electricity without affecting carbon dioxide emissions. And electrifying industrial processes or shipping and aviation is a bigger challenge than electrifying road transport.

But if “hard to reduce” means that these sectors lack the technology to reduce emissions, then it’s hard to support that. Emissions from steel, cement and chemicals can be reduced by using carbon capture technology, which can work well at scale. That’s before looking at other technologies, such as using only renewable electricity to make steel from iron ore (via electrolysis), or replacing limestone with carbon-free feedstocks for cement, or deploying green hydrogen for chemical production.

Meanwhile, any arguments suggesting that these emission-reduction technologies are too expensive are good reasons to push for more investment in research, additional policy support to reduce the green premium, or deals with established companies that can help lower costs across the sector. Take H2 Green Steel: The startup raised billions of dollars in part by securing advance purchase contracts from large companies like Mercedes-Benz and Ingka Group early on. Michael Liebreich, CEO of Liebreich Associates and managing partner of EcoPragma Capital, is more direct. “There are no more so-called hard-to-reduce sectors,” he wrote for BloombergNEF earlier this year. “There are just some sectors where clean solutions are not projected to undermine their fossil-fuel alternatives, perhaps ever. They will require a price on carbon, but it will be an affordable price on carbon: one that we are wealthy enough to pay if we so choose.”

Liebreich told me in an interview that it’s better to use the phrase “affordable to reduce.” That is, it’s not “free to reduce,” because implementing these low-carbon technologies comes at a cost, and some of them may never become cheaper than fossil-fuel alternatives. But the costs are becoming more affordable, especially when compared to the costs society will face if it doesn’t act on climate change.

That’s why Curry doesn’t use “hard to reduce” in any of his reports for BloombergNEF. This isn’t to minimize the challenge or the effort that needs to be put into these industries. It’s to recognize that there are technologies now that can solve the emissions problem and proven policy tools that can help scale up those technologies. That understanding is starting to show up in net-zero commitments not only from countries but also from companies across many industrial sectors.

Until 2018, there were no large companies or countries with net-zero emissions targets. Now, most large companies (including those in hard-to-cut sectors) and countries have net-zero emissions targets, meaning there’s no getting away from the need to reduce all emissions. “It becomes a really transgressive act to say something is too hard,” Liebreich said.