By Frederick Teo, Puar Si Liang, Tim Gould and Luca Lo Re
Innovative technologies like low-emissions hydrogen, sustainable aviation fuels (SAF), and direct air capture and storage (DACS) hold immense potential to decarbonise hard-to-abate sectors. However, to realise the IEA Net Zero Emissions by 2050 (NZE) and limit global warming to 1.5° C, these technologies require a massive and urgent acceleration in deployment by orders of magnitude.
The significant scale-up of these technologies hinges on early deployment and investment. In 2023, the level of investment in low-emissions hydrogen, SAF, and DACS was USD 8.5 billion. To fulfill the NZE Scenario, this number must grow to nearly USD 300 billion per year by the early 2030s and reach around USD 700 billion per year by mid-century.
Mobilising this level of investment would require support from governments to deploy a mix of complementary policies and innovative financing instruments. High-quality carbon credits can be a tool to help close the investment gap by attracting private capital to fund low-emissions hydrogen, SAF and DACS, especially in jurisdictions where no compliance carbon pricing instruments are in place.
Innovative technologies like low-emissions hydrogen, sustainable aviation fuels (SAF), and direct air capture and storage (DACS) hold immense potential to decarbonise hard-to-abate sectors. However, to realise the IEA Net Zero Emissions by 2050 (NZE) and limit global warming to 1.5° C, these technologies require a massive and urgent acceleration in deployment by orders of magnitude.
The significant scale-up of these technologies hinges on early deployment and investment. In 2023, the level of investment in low-emissions hydrogen, SAF, and DACS was USD 8.5 billion. To fulfill the NZE Scenario, this number must grow to nearly USD 300 billion per year by the early 2030s and reach around USD 700 billion per year by mid-century.
Mobilising this level of investment would require support from governments to deploy a mix of complementary policies and innovative financing instruments. High-quality carbon credits can be a tool to help close the investment gap by attracting private capital to fund low-emissions hydrogen, SAF and DACS, especially in jurisdictions where no compliance carbon pricing instruments are in place.
