With onsite hydrogen production from renewables, businesses can have zero emission transport without the problems associated with electric vehicles – long refuelling times, range anxiety and impacts on payload. Manufacturers such as Daimler and Volvo are expecting a hydrogen-based truck boom this decade
Celia Greaves, CEO of the UK Hydrogen and Fuel Cell Association
One of the significant challenges faced when trying to reach net zero is the sheer number of decarbonisation options to pursue. However, this can also work to an organisation’s advantage, allowing them to make changes to various operational elements. Energy experts reveal to Facilitate where organisations can direct their focus and some of the hurdles they will need to overcome.
UK businesses have been left in limbo after the government axed its Non-Domestic Renewable Heat Incentive (ND RHI) earlier this year, which provided firms with financial incentives to increase their uptake of renewable heat. Its long-awaited Heat and Buildings Strategy may provide business with more certainty.
A range of support schemes, incentives and backstop regulations are needed, says Charles Wood, head of New Energy Services and Heat at Energy UK. “It's a difficult challenge, but one that needs to be addressed as the market develops and delivers efficiencies of scale to reduce costs,” he tells me. “Upfront cost is the biggest challenge to deployment facing building managers.”
Heat pumps – which move heat from the ground or air surrounding a property into the building itself – are the most cost-effective alternative heating solution for businesses to adopt over the next decade, although Wood believes that heat networks and hydrogen boilers will also be increasingly useful.
“It depends on the attributes and geographical location of the property as to which one, or what mix, will provide the right solution,” Wood explains. “The role of these technologies will be impacted by the actions of the government, as support schemes, policy and regulatory frameworks will deliver market confidence to scale up delivery.”
Another challenge is access to reliable information on heating options, as are planning regulations and taxation. Wood explains how taxation at national and local levels “actively disincentives” uptake, with business rates often higher for firms that install low-carbon assets, and VAT rates retained at 20 per cent for existing alternative heat technologies.
Wood says that smart controls and automation will be a “critical part” of delivering net zero emissions at a low cost. “These can simplify operation, ensure efficiencies through monitoring, and reduce energy costs overall. As the market develops for low carbon heat, low carbon transport, energy efficiency, and onsite generation, these controls will result in a series of energy service offerings that have not yet reached mainstream uptake.”
Some businesses are looking at hydrogen and fuel cell technology to help them achieve their net zero emissions, and although deployment is not widespread, the Committee on Climate Change (CCC) envisages 30TWh of low-carbon hydrogen power in the UK by 2030, rising to 225TWh by 2050.
Key opportunities for businesses lie in transport fleets, and commercial and industrial power and heat. Celia Greaves, CEO of the UK Hydrogen and Fuel Cell Association, says that hydrogen-fuelled trucks and vans could become the most competitive low carbon option by 2030. “With onsite hydrogen production from renewables, businesses can have zero emission transport without the problems associated with electric vehicles – long refuelling times, range anxiety and impacts on payload. Manufacturers such as Daimler and Volvo are expecting a hydrogen-based truck boom this decade.”
Cost is again the key challenge for businesses looking to adopt the technology. The government's eagerly awaited Hydrogen Strategy is expected to include measures to scale up hydrogen production and bring down costs, having previously noted the need for the deployment of low-carbon hydrogen at scale.
“We are calling for support to help businesses and other users access hydrogen solutions, including fuel cells,” Greaves says. “In the short-to-medium term, we will also need measures that either support the generator of power held and released in a fuel cell, or which incentivise consumer purchasing.”
The CCC has already outlined how hydrogen can deliver cheap, low carbon power generation, electrified transport, and new ‘hybrid’ heat pumps, replacing natural gas in parts of the energy system where electrification is not feasible.
In the meantime, Greaves says that members of her association are already helping companies adopt the technology. “This includes stationary and mobile refuelling; back-up, remote and building power and heat; and transport solutions, encompassing refuelling infrastructure and fuel cell vehicles and hydrogen internal combustion vehicles.”
For light vehicles, the grants and tax incentives made available by the UK government mean that, for many businesses, electric vehicles (EVs) are already a cost-effective option to hit net zero targets. Sales rocketed in 2020, with data from the Society of Motor Manufacturers and Traders showing that the market was up 185.9% on the previous year, despite the impact of Covid-19.
The industry body also revealed that two-thirds of all new electric cars are now purchased by businesses, rather than private buyers. However, in some cases, EVs are not yet capable of performance similar to petrol or diesel vehicles. “This is particularly the case for large and heavy vehicles, where EVs are often an expensive alternative with more limited driving ranges and potentially lower payload capacity,” explains Jacob Roberts, transport policy manager at the Association for Renewable Energy and Clean Technology.
For businesses that do not require heavy-duty vehicles, it is sufficient access to charging points that can create the greatest barrier to adoption of EVs. “This can introduce a significant day-to-day risk for business fleets looking to run EVs, particularly where the vehicles have very high daily mileages, or have no reliable means of charging overnight,” Roberts says. “Another challenge for businesses looking to install multiple chargers to support a fleet of EVs is the additional costs that can be incurred to upgrade local electricity grids to support the additional power demand.”
Businesses can be more certain that their fleets are sufficiently charged by installing charging points on their premises, while another alternative is for staff to power their EVs at home. “One of the key challenges is ensuring that the vehicle is charged at the right time,” Roberts continues. “This can be as simple as ensuring an EV is charged overnight, or as complex as scheduling in multiple top-up charging sessions throughout a day. In either case, this may be a new concept to many fleet managers.”
Where it is not possible to completely eradicate emissions, companies are instead looking to offset these by purchasing credits that fund projects to remove carbon from the atmosphere, such as forest restoration.
Researchers at University College London (UCL) have predicted that the cost of offsetting corporate carbon emissions will increase 10-fold by 2030 due to increased demand as more companies look to achieve their net zero targets, and there are some that are concerned that firms are simply looking to offset as a quick fix.
“The problem arises if they are used to displace genuine reductions at source," explains Nick Blyth, policy lead at sustainability body IEMA. "Atmospheric emissions need tackling on as many fronts as possible, so offsets can have a role to play, but we do need to follow science-based reductions, and offsetting without that cornerstone would certainly be a problem.”
Part of the shortcoming with offsetting is that it takes time to sequester carbon in the atmosphere, and the effects of purchasing credits will only be felt decades later. It takes time for trees to grow, for example, and no amount of forest restoration will be able to offset all of society’s carbon emissions. “Many organisations seem to now recognise the need for reductions at pace,” Blyth says. “The imperative is to transition, and not to just offset.”
The move away from offsetting will be challenging for businesses, but it is possible to adapt buildings, and the facilities services provided to those buildings, so that they are completely carbon neutral without the use of offsets. “There are many great designs and initiatives, passive, modular, use of innovative materials, buildings that contribute back to the grid or to local networks,” Blyth says. “Transparency is important so stakeholders can understand the net-zero approach being followed. Increasingly, there is a mainstream understanding that net-zero is first and foremost about transition and change.”
Image credit | Sam Chivers
This article forms part of Facilitate's net zero coverage, the core theme of the July-August 2021 edition.