Dr. Pasi Keinänen, Liquid Sun Ltd. Chief Executive Officer.
The most significant question regarding the green transition and the ecological crisis is how quickly and extensively we can produce synthetic hydrocarbons at a competitive price.
Hydrocarbons, the backbone of our modern world, have shaped societies, civilizations and our quality of life. From energy to raw materials, they’ve fueled innovations in transportation, agriculture, pharmaceuticals, petrochemicals, plastics and textiles. The clock is, however, ticking on our historical reliance on fossil fuels, and the pivotal question in the green transition era is how swiftly we can replace them with cost-competitive synthetic alternatives.
The constant churn of innovations in alternative fuels is promising, but the stumbling block remains the cost of these alternatives. Factors such as electricity prices and a centralized production model loom large in the cost equation. To scale up production, we must grapple with challenges like storage solutions and a shift from centralized to decentralized production models, a shift essentially putting energy production where consumption occurs globally.
The urgency to accelerate change is heightened by the impending hard stop: Fossil fuels are projected to diminish within the next 40 to 50 years, if not sooner. We have heard predictions like this for decades, but this time the deadline is real: Investments have actually changed their direction and are now steering away from fossil fuel-based infrastructure, with the energy industry focusing on renewable fuels. In addition, increased regulations, incentives and public opinion will accelerate the shift.
Contrary to earlier beliefs, scaling sustainable solutions is not impossible. The rapid pace of consumption acts as a catalyst for change, as dwindling fossil fuel reserves lead to a convergence of prices between fossil fuels and synthetic alternatives.
Maintaining our current standard of living calls for the replacement of fossil hydrocarbons, but challenges abound. The transition requires substantial investments in infrastructure for production, storage and distribution. Globally and nationally, there’s a lack of public discourse on the opportunity costs of the green transition, with retrofitting existing infrastructure and building new facilities posing significant financial hurdles.
Moreover, a nuanced understanding of the environmental impacts of different technologies and processes is lacking. Not all synthetic alternative production methods are eco-friendly, and increased investment is needed to scale up green technologies, incorporating processes like carbon capture and utilizing existing infrastructure.
In a broader context, hydrocarbons are entwined with questions of interdependence and the need to break free from such dependencies. Currently, 82% of the world’s energy is sourced from fossil fuels, often concentrated in nondemocratic nations. Developing local energy solutions challenges the power dynamics of dictatorial regimes and emphasizes the importance of technological solutions that empower local communities.
As we navigate the complexities of the green transition, the key lies not only in innovation but also in addressing the economic, infrastructural and geopolitical challenges that come with replacing our long-standing reliance on fossil hydrocarbons. The transition is inevitable, and our success hinges on proactive, informed decision-making at the global and local levels.
As the green transition is a generic term to describe the change needed, the question remains: What are the concrete actions we can take? The list is long, but we should start by identifying and developing standards for evolving carbon capture and utilization (CCU) technologies to enable scalability and the mass production of critical parts.
Second, we should focus on developing less energy-consuming technologies to reach price parity with fossil fuels.
Third, new technologies should utilize and be built on current infrastructures and industries. For example, existing biorefineries with CO2 and electricity availability combined with CCU technologies could produce valuable feedstocks for e-fuels and e-chemicals.
Ultimately, to replace fossils, we need more cost-effective carbon-neutral alternatives. Until that, the shift to a greener world will be too slow.
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