He points out that the production of green hydrogen, which is CO2-free since it involves renewable electrical energy as its power source, will have to be scaled up dramatically if the net zero target is to be met. The share of green hydrogen of the total EU energy requirement can be expected to rise from 2% currently to 15% by 2050.
This will require setting up an entirely new industry including storage and distribution at an estimated cost of EUR 340-460 billion. The key to success will be the creation of a virtuous feedback loop between public policy and private capital, innovation and technology improvement, much the same as the interaction that has allowed the EU to build a renewable energy industry from scratch.
The outlook for green hydrogen and with it the prospects for zero emissions is positive, Mark concludes.
Read the white paper Green hydrogen, net zero and the future of the EU-ETS
Any views expressed here are those of the author as of the date of publication, are based on available information, and are subject to change without notice. Individual portfolio management teams may hold different views and may take different investment decisions for different clients. This document does not constitute investment advice.
The value of investments and the income they generate may go down as well as up and it is possible that investors will not recover their initial outlay. Past performance is no guarantee for future returns.
Investing in emerging markets, or specialised or restricted sectors is likely to be subject to a higher-than-average volatility due to a high degree of concentration, greater uncertainty because less information is available, there is less liquidity or due to greater sensitivity to changes in market conditions (social, political and economic conditions).
Some emerging markets offer less security than the majority of international developed markets. For this reason, services for portfolio transactions, liquidation and conservation on behalf of funds invested in emerging markets may carry greater risk.