Decarbonisation basics, and some more V2G

I've started Decarb Diary as a place to publicly capture and share what I learn as I enter into a discovery phase in climate, energy and decarbonisation, to find the most painful problems that I have the skills to help solve. My initial hypothesis is that my skills and experience learn towards helping the business sector, transport and household electrification. Learn more here.

Key Insights this week:

• I keep getting surprised by how impactful some things are that I’d previously considered quite minor, such as in vehicle idling and waste
• 10 mins of vehicle idling per day for 1 year = 60kg CO2 and costs $35, and has short and long-term health impacts, including at hot-spots like school pick-up/drop-off zones. More broadly, transport emissions are linked to 1715 Australian deaths each year, higher than the annual accident road toll, but without the same visual impact!
• In 2016-17, organic waste that went to landfill generated about 3% of Australia’s greenhouse gas emissions! How do we get people to (further) put it in the right bin? How about a smart bin that recognises and sorts waste in real-time?
• Decarbonisation is the reduction and removal of CO2 and other GHGs from the atmosphere at the point of emissions or from the air (direct air capture).
• Carbon markets, carbon credits, CCUS (carbon capture, utilisation and storage), and both nature-based and engineered / tech-based carbon removal solutions are the mechanisms and enablers for decarbonisation.
• Australia has just approved the V2G (vehicle to grid) standard that will allow bi-drectional charging between EVs and the grid. This is a critical piece to the transition, where EV batteries can soak up excess renewable energy and release it back when demand peaks. It will also give consumers the ability to not only save, but also earn, money. The ‘batteries on wheels’ concept is starting to come to fruition. I see a big opportunity here.

New information this week (aka Contents):

1. Vehicle idling’s emissions and health impact
2. Doconomy - European startup allowing customers to convert financial transactions into real-world environmental footprint
3. High-level summary of decarbonisation, carbon markets, carbon credits, CCUS (carbon capture, utilisation and storage), and both nature-based and engineered / tech-based carbon removal solutions
4. What are REGOs & LGCs, and how do they differ
5. What are Carbon Leakage and Carbon Border Adjustment Mechanism (CBAM)
6. Greenwashing overview
7. Waste - a surprising stat
8. What MLF (marginal loss factors) means
9. More on V2G/VPPs now that V2G standards have been approved in Australia
10. How an electric motor works - a simple explainer video

New content sources:

• RACE for 2030 - Industry-led CRC around accelerating the transition to Reliable, Affordable, Clean Energy for 2030.

Industry bodies:

• Climate Reality - Founded & chaired by Al Gore, The Climate Reality Project has several climate leadership training courses that identifies potential climate leaders and equips them with the training and tools to educate others and drive change.

Funding:

• Microsoft Climate Innovation Fund - primarily helping companies scale across four areas - climate impact (carbon, waste, water, ecosystems), underfunded markets, shared alignment (relevant to Microsoft), climate equity (developing economies).
• SA Govt Research and Innovation Fund - focussed on R&D, commercialisation and innovative, early-stage companies.?

Vehicle Idling

Interesting points I came across this week:

• 10 minutes of idling your car per day over 12 months = 100g of noxious fumes + 60kg of CO2 emissions + $35 of fuel. (source)
• 1kg of CO2 is equivalent to driving for about 3.7kms, or using 0.5L of petrol in your car (=$0.90 based on $1.80/L). (source)
• There are short-term and long-term health effects, particularly when many drivers are idling in the same place, such as at a school drop-off or pick-up location, creating an air pollution hotspot. These can cause impacts for individuals and at a societal level. For example, a Sydney air quality study found that vehicle exhaust emissions account for an estimated $614 million a year in health costs to the state. (Source: NSW Govt page on vehicle idling: here)
• Transport emissions are linked to 1715 Australian deaths each year, higher than the annual accident road toll but without any of the highly visible prevention campaigns (source)
• This article on the Conversation from June 2020 summarises the TER Motor Vehicle Engine Idling report.

Other articles and research papers related to this:

• NSW Govt’s page on vehicle idling basically covers everything, including tips to reduce or remove idling: here
• The Idle Off Project, launched in 2020 by an EV agency, and is a free online resource to aimed at secondary student drivers, parents and bus drivers all related to idling
• Transport Energy/Emissions Research, an independent research organisation, conducted a critical review and initial assessment of Motor Vehicle Engine Idling in Australia in 2020 report. Its objective was to provide an initial assessment of the relevant of idling and its impacts on fuel consumption, emissions and local air quality in Australia.
• An academic paper on the “multi-site analysis of the association between black carbon concentrations and vehicular idling, traffic, background pollution, and meteorology during school dismissals” - here.

Doconomy - startup helping track emissions at POS

When I was hosting the Idea Overflow podcast, one guest spoke about Doconomy, a European-based startup that works with banks, and allows their customers to convert financial transactions into real-world environmental footprint by measuring their CO?e (carbon dioxide equivalent) impact.

You can listen to that Idea overflow Episode at the 29m 30s mark - 34. Why the Zebra Economy is the Next Big Thing with Allys Todd.

Decarbonisation, Carbon Market/Credits, Carbon Capture, Utilisation & Storage

This article has a really good summary of decarbonisation, carbon markets, carbon credits, CCUS (carbon capture, utilisation and storage), and both nature-based and engineered / tech-based carbon removal solutions.

Decarbonisation:

• Decarbonisation is the reduction and removal of carbon dioxide and other greenhouse gasses from the atmosphere.
• It has two elements: reducing the amount of CO2 and other greenhouse gasses that are released into the atmosphere, and second, actively removing CO2 from the atmosphere, whether at the point of emissions (point source capture) or from the air (direct air capture, or DAC).

Carbon Markets:

• Carbon markets are systems where companies, governments, or individuals can buy and sell carbon credits. Think of it as a marketplace for trading rights to emit greenhouse gases.
• There are two main types: Compliance Markets - created by government regulations (e.g., cap-and-trade systems), where companies must reduce emissions or buy credits if they exceed their limit; and Voluntary Markets - Where organizations or individuals buy credits to offset their emissions voluntarily, not because they’re required by law.

Carbon Credits:

• Tradable units that represent the right to emit one metric ton of CO? or equivalent greenhouse gases.
• A company might earn credits by reducing emissions below a set limit or by investing in projects that prevent emissions (like renewable energy). These credits can be sold or traded in carbon markets.

Carbon Offsets:

• Actions or projects that reduce or remove CO? from the atmosphere to compensate for emissions elsewhere.
• Companies or individuals buy offsets to “balance out” their emissions. For example planting trees (which absorb CO?), funding renewable energy projects, and protecting forests to prevent deforestation
• Offsets often generate carbon credits. So, if a forest conservation project removes 10,000 tons of CO?, it might create 10,000 carbon credits that can be sold in a carbon market.

Relationship between Markets, Credits and Offsets:

• Carbon offsets are projects or activities that reduce emissions (the trading system)
• These projects generate carbon credits, which can be sold in carbon markets (the currency)
• Companies use credits from offsets to meet emissions targets or voluntarily reduce their carbon footprint (the projects)

Carbon capture, utilisation and storage:

• Technology that addresses CO? emissions at the source in industrial and power facilities by capturing, concentrating and purifying the CO?.
• The CO? is then transported somewhere to be permanently stored (CCS = Carbon Capture Storing) or used as feedstock for manufacturing processes (CCU = Carbon Capture Utilisation)
• It’s good for many hard-to-abate sectors that rely on fossil fuels
• Some of the most promising removal methods are: biochar and bio-oil, ocean alkalinity enhancement, enhanced weathering, bioenergy with CCS, direct ocean capture, and DAC and storage (read the article for descriptions).

REGOs & LGCs

REGOs (renewable energy guarantee of origin certificates) are certificates that verify electricity has been produced from renewable sources like wind, solar, or hydro, primarily used in the UK and EU. For every megawatt-hour (MWh) of renewable electricity generated, one REGO certificate is issued. These certificates can then be traded separately from the electricity itself.

LGCs (Large-scale generation certifications) are issued under Australia’s Renewable Energy Target (RET) to incentivise large-scale renewable energy projects. One LGC is issued for every MWh of electricity generated from a large-scale renewable source. Energy retailers are required to purchase a certain number of LGCs each year to meet government-mandated renewable energy targets. This creates demand for LGCs and provides financial support for renewable energy producers.

Key differences are that REGOs are voluntary, help provide transparency and cover all renewable energy generators, including small-scale. LGCs are mandatory for energy retailers, are financial incentivise for renewable energy generation and are only for large-scale generators.

Carbon Leakage and Carbon Border Adjustment Mechanism (CBAM)

Carbon Leakage

Describes when efforts to reduce greenhouse gas emissions in one country lead to an increase in emissions in another country, which usually occurs for two reasons:

• Industries relocate to countries with weaker environmental regulations to avoid strict emission rules or costs (like carbon taxes).
• Imported goods replace local production, shifting emissions to countries with less stringent climate policies

In 2021, 1.4 billion tonnes of CO? were linked to Australia's exported fossil fuels, which is nearly three times the emissions produced domestically.

For more, the Australian Govt recently reviewed this issue policy, and this episode of the Let Me Sum Up pod reviewed the review - Just A Border Carbon Adjustment Adjusting Carbon At The Border.

Carbon Border Adjustment Mechanisms (CBAMs)

A policy tool designed to prevent "carbon leakage," which aims to level the playing field by imposing a carbon price on imports equivalent to that faced by domestic producers.?

Basically it aims to ensure imported goods are subject to the same carbon costs as those produced domestically where importers must purchase CBAM certificates corresponding to the carbon emissions embedded in their imported goods.

The implementation of CBAM is expected to influence global trade, particularly affecting countries exporting carbon-intensive goods to regions with CBAM policies.?

The EU seems to be leading the way - their CBAM entered into force on 1st Oct 2023, with a transitional phase requiring importers to report emissions embedded in their goods. From 2026, importers will need to purchase CBAM certificates to cover these emissions for steel, and will be fully phased in by 2034.?

Read more here.

Growing Global Energy Demand x Accelerating Electrification

I read a good (albeit obvious in hindsight) article this week in that not only do we need to add more renewables to offset fossil fuels, but we’re also increasing our consumption as we move to electrification - things like EVs, home & building?electrification and data centres are big contributors.?

From (source): Global energy demand is projected to grow between 11-18 percent by 2050. Most of this growth will come from emerging economies, where growing populations and a strengthening middle class will result in higher energy demand. The relocation of manufacturing industries from mature to emerging economies will further shift demand to these economies.

Electrification is accelerating - between 2023 and 2050 electricity consumption could grow 2x-3x. This is in comparison to total energy consumption growth of up to 21 percent over the same period. Electricity is projected to become the largest source of energy by 2050 across scenarios, with consumption coming from traditional sectors (for example, electrification of buildings) as well as newer sectors (such as data centres, EVs, and green hydrogen).

Greenwashing

Greenwashing is prohibited under Australian Consumer Law and is?the act of making false or misleading statements about how environmentally friendly, sustainable or ethical a product or practice is.?

It can be a way for companies to continue or expand their polluting as well as related harmful behaviours, all while gaming the system or profiting off well-intentioned, sustainably minded consumers.

Nature-based imagery - such as trees, leaves, or animals - on product packaging and in advertisements can imply sustainability without having any real meaning behind them.

Environmental buzzwords that have no legal weight - like “natural” or “eco-friendly” - and tell you little about a company’s specific sustainability practices are also everywhere. These terms are misleading if they are not accompanied by information about why the product is environmentally friendly.

While companies pushing their latest initiatives may be legitimate, they may sell them in a way that draws attention away from the harmful activities making up the majority of their business practices.

Waste

This is a much bigger topic, but I came across this interesting point this week that I found surprising - a high proportion of green waste goes into general waste, which released 1500 tonnes CO2 by going to landfill, but it would’ve only released 32 tonnes if it went to the proper organic bin.

I looked up a little more and saw that in 2016-17 Australia sent about 6.7 million tonnes of organic waste to landfill (out of about 30 million tonnes, or about 22%, generated in total), which generated about 3% of Australia’s greenhouse gas emissions. (source).

IDEA: Smart Detection Bins

Problem - in offices, people want to do the right thing but no one has memorised all the things and which bin they go in. I’ve also heard anecdotally that all bins are just emptied into the same big bin and all taken to landfill anyway!

Solution - create a smart detention bin that has only one slot to put rubbish in, with an AI Image Detector determining what the rubbish item is. It can then go ‘behind the scenes’ and be washed (if required) and dropped into the correct bin via a robotic arm or conveyor belt type setup.?

Marginal Loss Factors (MLFs)

MLFs are used in electricity markets to account for the energy lost as electricity travels through power lines from generators (e.g., power plants) to consumers (e.g., homes, businesses).

When energy travels some of it is lost as heat due to resistance in the transmission and distribution lines. The further the electricity travels or the more congested the grid, the higher the losses.

MLFs are applied to adjust payments to electricity generators, ensuring they reflect the actual amount of electricity that reaches consumers after these losses.

An MLF represents the proportion of electricity from a generator that is actually delivered to the grid. An MLF of 0.95 means that 5% of the electricity generated is lost during transmission, while 1.05 means the generator is located close to demand, so they "gain" an additional 5% credit for reducing overall grid losses.

Here’s a simple example:

• A solar farm generates 100 megawatt-hours (MWh) of electricity.
• It’s located far from major cities (where most of the electricity is used), and some energy is lost during transmission.
• The MLF for this solar farm is 0.90.

• Since only 90 MWh of the solar farm’s electricity reaches consumers, it’s only paid for for 90 MWh, not the full 100 MWh it generates.

Read more here.

V2G & VPP

From the Energy Insiders podcast episode: Why batteries on wheels will be the next big thing (15 Nov 2024).

AS47772 is the standard that has recently been changed to allow for bi-directional charging from EVs to the grid (V2G, or vehicle to grid), where EV batteries can soak up excess energy and release it back when demand peaks.

You can have a wall charger that will do the work, but they’ll likely come to market at around A$6k (which could come down to around $3,500 as the market grows). Or the in-car option (where the conversion is done in the car) will only be a few hundred, but there are very few manufacturers including this at this stage.

It will only apply to CCS2 connectors, which is a type of charging cable that EVs use. There are a few other types of connectors, but like all the great format battles of the past (betamax vs. video, blu-ray vs, HD DVD, Plasma vs. LCD, etc), it looks like CCS2 is the winner.

(~25 mins) there are really two models:

• The ‘traditional’ VPP model, or utility agent model, where the utility gives some kind of benefit to the homeowner but in return gets to control their energy resources
• Customer agent model where the consumer is exposed to the wholesale price and has the opportunity to save and earn money through the technology optimising the whole system.

(~27m 30s) Australia’s main grid will need 640 GWh or storage by 2050, and by that time the EV fleet will be nearly 4x that. That means that bi-directional charging from only 10% of these could provide around 37% of total grid storage needs. By 2030, EV storage is likely to become the biggest form of storage - even surpassing Snowy 2.0.

Further, enabling V2G is estimated to cost just 6% of the cost of building big batteries. Coupled with the fact that people are going to buy cars anyway, and that most cars sit idle for 95% of the time, it seems like a no-brainer.

How an electric motor works

Being honest, I had no idea how this worked! But I found this to be a really great explainer video about how electricity, magnets, and electromagnets work to turn the motor.

Glossary

• CCUS = carbon capture, utilisation and storage
• CCS = Carbon Capture Storing
• CCU = Carbon Capture Utilisation
• REGOs = renewable energy guarantee of origin certificates.
• CBAM = Carbon Border Adjustment Mechanism
• MLF = marginal loss factor
• LCoE = levelised cost of energy - compares the cost of generating electricity from renewable energy technologies (e.g., wind and solar) to conventional technologies (e.g., gas, coal and nuclear), allowing for an apples-to-apples comparison of different technologies by accounting for factors like generation/output, upfront capital costs, fuel costs, operating and maintenance expenses, and asset lifetimes. (read more here)
• NIMBY / NIMSBY = not in my (second) backyard - referring to people in regional areas not wanting new large-scale renewable technology plants built near them
• BANANA = build absolutely nothing anywhere near anyone - related to the above
• HEMS = household energy management system
• BMS = building management systems

I encourage you to reach out if:

• I've said something wrong or partially wrong,
• there's an additional thing I should know about something,
• you think it would be valuable to talk to you, or
• you know someone I should talk to!

Cheers,

Dan