[Episode #149] – Green Hydrogen and Carbon Prices

We’ve all heard about the potential of “green” hydrogen — hydrogen produced from carbon-free sources — to help decarbonize the ways we use energy by making variable renewable power from wind and solar available on-demand. The European Union is counting on green hydrogen to meet its carbon reduction goals under the Paris Agreement.

But the cost of green hydrogen is still considerably higher than the “gray” hydrogen made using fossil fuels, which currently dominates global hydrogen use. If truly carbon-free green hydrogen is going to reach price parity with its dirtier cousins, two things need to happen: production costs must fall, and some form of carbon pricing will need to increase the price of gray hydrogen, leveling the playing field.

But what carbon price can make this happen, and how much will the cost of producing green hydrogen need to fall? And when do these repricings need to occur for Europe to achieve its carbon reduction goals under the Paris Agreement?

Our guest in this episode, Mark Lewis, Head of Climate Change Investment Research at BNP Paribas Asset Management in Paris, shares his answers to these questions with us, using the European Emissions Trading System (ETS) as a basis.

Also in this episode: We make several exciting announcements, including announcing that host Chris Nelder will now be working full time on the podcast!

Guest:

Mark Lewis is Head of Climate Change Investment Research at BNP Paribas Asset Management. Previously, he was Head of Research and Managing Director at Carbon Tracker, a non-profit company based in London which publishes research on the financial aspects of climate risk. Prior to Carbon Tracker, Mark was Managing Director and Head of European Utilities Research at Barclays (2015-18), Chief Energy Economist at Kepler Cheuvreux (2014-15), and Managing Director and Global Head of Energy Research at Deutsche Bank, where he worked for 14 years until 2013. In addition to his experience as a sell-side financial analyst, Mark spent one year as Deputy Head of investor relations at E.ON at the beginning of the Energiewende, and two years as a credit analyst covering the European utility sector at Standard & Poor’s. In total, Mark has over 20 years’ experience as a financial analyst covering global energy and environmental markets.

On Twitter: @MCL1965

On the Web: Mark’s page at BNP Paribas

Recording date: May 12, 2021

Air date: June 9, 2021

Geek rating: 5