To achieve Paris targets, broadly speaking, we need to do two things:

1. Develop a phenomenal amount of renewable energy to displace these fossil fuels.

2. Get a lot smarter on business models, to turn the energy transition into a commercially viable and attractive opportunity.

Stepping back, we can break this 40 billion tonnes of CO₂ into two discrete categories by energy end-use: Entry level decarbonisation: this category includes our homes, offices and cars…we know how to decarbonise these sectors... and the business models to do so are apparent and commercially viable. The shorthand solution here is to ‘electrify everything’. Next frontier of decarbonisation: to achieve net zero, we still have to tackle the 55% of all energy demand that comes from hard-to-abate sectors - cement, steel, chemicals, shipping, aviation.

55% of all energy demand comes from cement, steel, chemicals, shipping, aviation

As mentioned, the mainstream view on how to decarbonise has to date been one of ‘electrify everything’, with a grid powered exclusively by renewables. However, what that means in practice longer-term is attempting to put entire economies through electricity grids which were all built decades ago and designed to carry a fraction of energy-end use.

It simply won’t work.

For context... 95% of renewable energy projects never achieve a grid connection. Insane.

To demonstrate the challenge that is already clear, we take a few case studies from countries supposedly leading the energy transition. On average, just over 20% of energy is going through the grid and already warning signs are flashing everywhere.

95% of renewable energy projects never get built.

1. In 2020, Germany pumped Eur 1.4bn worth of electricity into the ground as the grid couldn’t balance energy demand and supply.

2. In 2022 Spain had over 400GW of solar projects just waiting for a grid connection. To put that number into perspective, that’s the equivalent of 400 nuclear power plants queuing for the grid.

For the multitude of sectors hard to electrify which represent 55% of total energy demand... the grid is a massive constraint.

We need an alternative approach.

Now let’s turn towards the problem with commercially viable business models. Historically, companies and individuals have had a choice... either ‘better for me’ - profit, or another personal gain - or better for the planet. Decarbonisation to date has been a personal sacrifice.

This has meant that historically there was very limited overlap between decarbonisation and business as usual - between regulatorily driven and commercially viable. But is there an opportunity to approach this differently?

Let’s touch upon green premium thinking, and how this can Hyperscale decarbonisation.

The green premium is effectively the cost to switch from fossil to decarbonisation technologies. Let’s illustrate how this works with a simplified example.

Cars require a multitude of materials in their production process. To become a fully green car, each of these materials needs to be manufactured from renewableenergy. A key component in cars is of course steel, which is notoriously hard and expensive to decarbonise. Steel needs to deploy either hydrogen or CCS.

A fully green car or shoe should only cost 1% more if decarbonisation is delivered through green premium thinking

If you were to try to persuade a steel plant to fully decarbonise by switching to either hydrogen or CCS, that conversion is incredibly expensive... often equating to a 300% increase in their production price. They would only do it if their direct customer were willing to pay. This is the commodity pricing mindset, razor focused on cost...

As you move down the chain getting nearer to the ultimate end-consumers, margins are higher and the mindset is totally different. Retailers think with a value-based mindset, not cost. The cost of decarbonisation - the green premium - when spread across the entire chain drops to a mere 1%, and that number will only come down if done right.

To use all that green steel in creating the first green car equates to less than 1% in terms of cost increase. Tesla is a great example of a company that has understood this dynamic - pricing their greener cars significantly over cost and even at a significant premium compared with cars made with old fashioned regular steel.

Imagine if we could align incentives across these value chains and commercially structure viable propositions to decarbonise, helping companies to shift their mindset from cost based thinking towards value-based thinking... and sharing the risk and reward fairly.

In sum... the two major problems to achieving net zero for the next frontier are Hyperscale renewables, and commercially viable business models.

This is where ETFuels enters.

Our vision and mission are derived from, and enveloped by, these two core problem statements.

We will deliver the energy transition at Hyperscale through unlocking the potential of renewables, while in parallel aligning interests around decarbonisation.

Off-grid green fuels are the key to unlocking industrial decarbonisation at Hyperscale

To deliver this we will pioneer by forging a path for producing green fuels without needing to use the electricity grid - or, what we refer to as using “off-grid” power... this will enable us to become the most competitive and most scalable producer of green fuels through a series of self-autonomous plants. This means we don’t need a grid connection and can develop our projects in the middle of nowhere on land for which today there may well be no other commercial use.

We can unlock Hyperscale without the grid acting as the bottleneck.

We will also make this a commercially viable proposition. We start with the end-customer and align interests on decarbonisation regardless of regulatory outcomes.

To do so, we looked at fundamental supply and demand drivers, customer willingness to pay, and scalability as a starting point.We have designed a platform to decarbonise a myriad of hard-to-abate sectors from steel through to aviation, but we needed to prioritise to a starting point.

For us this means shipping and green e-methanol which is where ETFuels will begin to deliver decarbonisation at Hyperscale.

Ships are the lifeblood of the modern economy with 90% of the world’s goods crossing the oceans and 5% of global emissions. Shipping is firmly within the ‘next frontier of decarbonisation’ but a critical lynchpin in almost all supply chains.In the last 12 months everything has changed...

Very simply ships have two options to decarbonise. They need to switch from heavy fuel oil or LNG to consume green e-methanol, or green ammonia. Today ammonia is fraught with regulatory hurdles because it is challenging, unsafe (and explosive) to store and transport for use in ships.

When we began ETFuels the debate raging was one of ammonia vs methanol. Since then customer pressure and game-changing regulation in the form of EU ETS and FuelEU Maritime have resulted in an explosion of methanol shipping orders...

in H1 2023, methanol-fuelled vessel orders dramatically outstripped all other fuel types in March 2023 for the first time in history.

Shipping companies are moving at pace because if they don't, they will receive heavy penalties of

€2,400/tonne of fuel for non-compliance... But still no green fuels supply at scale on the market.

E-methanol is therefore the only real fully green shipping fuel opportunity for the next 10 years but we do believe in a multi-fuel future. It’s in our name.

Our starting ambition was to produce the lowest cost product and find the best off-grid projects in Europe and North America. To achieve this we evaluated both continents to identify the most attractive places to begin, based on renewable energy costs, CO₂ availability and bunkering feasibility.

Spain, Finland and Texas in the US came out on top so that’s where we went.

The world will undergo a transformational change in everything we know today - energy, mobility, communication - at a pace never seen before.

We want to be ready for the opportunities through carefully fomenting building blocks to deliver energy transition at Hyperscale. This will include but by no means be limited to:

1. Execution engine: codifying our off-grid approach, we are delivering a vast portfolio of green fuel production plants across multiple countries, in Europe, the US and beyond

2. Go to market innovation: through our scale and customer-centric approach, we will optimise across our portfolio of green fuels, with trading optionality in multiple product and geographical end-markets. Resulting emission reductions will be enabled and tracked through our digital customer platform.

3. Multi-supply chain decarbonisation: ETFuels has designed its model with scale in mind. The off-grid green hydrogen production model has the potential to decarbonise multiple hard-to-abate industries including steel, chemicals, shipping and cement but can also apply this to growth sectors including data centres. We will replicate and scale across multiple end-products.

Our ambitions are immense, and our model is scalable. We can build our energy production facilities off-grid, anywhere, and we can do so in a commercially viable manner, independent of subsidies or regulation.

Our model will decarbonise entire economies and supply chains - this is how you deliver net zero, in a way that benefits everyone.

The off-grid green fuels model can be applied to decarbonise multiple industries and supply chains.