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by Philippe Dunsky

The following article is a translation of a blog post that first appeared in the publication Les Affaires as part of a regular column by Philippe Dunsky. Philippe’s column looks at big-picture developments in the transition to a low carbon economy and what they mean for both private and public sector players.

For the past few weeks, in Glasgow as in everywhere people are concerned about climate, one number has been on everyone’s mind: ZERO.

Indeed, the increasingly clear risk of global climate disruption is finally pushing nations to take action. And the science is clear: to avoid the worst, we must reduce and, by 2050, eliminate greenhouse gas emissions from human activity. Eliminate. Zero.

Without fanfare, my home province of Quebec adopted an official target last year: to reach “net zero” by 2050. Canada adopted the same objective a few months later.

But what exactly does net zero mean for Quebec? What will need to change – for consumers, building owners, shipping companies, industrial facilities, not to mention utilities and other energy players? While carbon neutrality will create winners and losers, no one will be left untouched.

Last month, my firm released a ground-breaking study (commissioned by the government of Québec) that, for the first time, answers these questions in detail. If we are to reach Net Zero at lowest cost by 2050, here are the major changes that await us:

  • Cars: by 2030, the vast majority of cars sold in Quebec will have to be electric; by 2035 at the latest, sales of cars with internal combustion engines must cease. Quebec already announced its intent to legislate this, a move the Canadian government will also adopt in the coming months.

The catch: for urban dwellers without private parking, sufficient public charging infrastructure will have to be available. And car dealerships, whose business models rely heavily on repairs and maintenance, will be challenged – EVs have barely 20 moving parts, compared to 2000 for a gas-powered car! Gas station owners will also have to rethink their business models.

  • Trucks: The transition will take a little longer, but one way or another, most trucks will also have to go electric. Unlike cars – which will all be battery-driven – truckers will have options: batteries may win the day for short- and medium-distance trucking, but for heavy and long-distance trucks, the jury is still out, and competition between batteries and hydrogen will be strong.

A dark horse: A third option – the hybrid catenary, in which trucks could get their charge from catenary wires along highways and thus need much smaller batteries for off-highway driving – could prove a dark horse, but only if governments and industry manage to pull off an unprecedented degree of collaboration.

  • Heating: Most homes and apartments in Quebec are already heated by electricity – a situation not typically found elsewhere. But for commercial buildings – think office towers, shopping malls and the like – natural gas or even oil still keep us warm. This will need to change.

In the short term, some buildings will have to switch to “all-electric” (most of them with heat pumps, which are particularly efficient), while most others will go “dual fuel”, wherein electricity meets roughly three-quarters of the needs and gas, the other quarter (generally during the coldest winter days). The latter solution will be sustainable as long as the gas utility succeeds in converting most of its network to renewable natural gas (RNG, a form of bioenergy).

The catch: the price of RNG could rise if other sectors – including aviation and shipping – covet its feedstock: biomass residues.

  • Industry: In Quebec, our largest industrial emitters produce metals (mostly aluminium), cement, pulp and paper and chemicals. Process heat, which uses a lot of fossil energy, will have to be quickly converted to electricity or biomass.

Beyond replacing fuels for process heat, we will also be looking to more innovative chemical processes. These include carbon-free anodes (for aluminum smelters), hydrogen, biomass in the iron industry, and alternative cement additives.

The backup option: Finally, for those sectors that have not succeeded in decarbonizing, the only remaining avenue – capturing and sequestering emissions – will be essential (albeit costly).

  • Planes, ships, trains…: When we think of transportation, we often think of roads, but a third of our transportation is elsewhere: in the air, on the water, on rail, in fields, or at mines and other industrial sites. The diversity of this sector will require a diversity of solutions.

For the single largest among these – air travel – the shortest routes (think Montreal-Quebec City) may run on electricity, while others (say, Montreal to Toronto, New York or even Miami) may switch to hydrogen. But to visit Vancouver, Paris or Shanghai, sustainable aviation fuels (essentially biofuels) will be the way to go. Their density simply can’t be beaten.

The catch: Some sources of biomass are quite sustainable (think cooking oil residues). But reliance on others could pose serious risks to ecosystems. “Save the climate, cut our forests” is a less-than-compelling rallying cry. The sector will have to show its mettle by adopting clear and credible procurement rules.

  • Utilities: Quebec – with its vast hydro reservoirs and decarbonized grid – has a head start. But to get to net zero will require significant new electricity (mainly from wind and solar), even if we manage to significantly improve energy efficiency and reduce energy waste. Bioenergy will also have to make a giant leap forward.

For utilities, significant challenges lie ahead: Hydro-Québec will need to meet and manage growing and shifting peak needs. And Énergir, Quebec’s major gas utility, will need to manage a shift in its very business model.

The silver lining: On the other hand, renewables suppliers – be they IPPs or others – are looking at seemingly boundless opportunities.

  • Efficiency & Waste: In all cases, a major energy efficiency initiative – one that will limit heat loss from buildings, make our industrial plants more productive and our vehicles more efficient – will be essential to minimize overall costs. Without this, the challenge may be impossible to overcome.

Similarly, these changes are all technological in nature. But technology alone won’t get us there. To minimize costs (and land use conflicts), we should also rethink our energy use and needs. For example, sensible infrastructure investments and land use planning can reduce reliance on cars and encourage both active and public transit. These changes – politically tricky as they might be – will not only reduce costs and technical challenges but also improve Quebecers’ health.

Giant steps forward

Over the past year, the Quebec government has made great strides in understanding the economic opportunity that the fight against climate change represents for us. Indeed, Quebec not only has everything it needs to succeed in the transition, but also has major assets that others do not have:

  • huge reservoirs that can serve as giant batteries,
  • a vast territory capable of receiving the wind and solar farms needed to electrify large parts of our economy,
  • a territory rich in minerals (nickel, cobalt and lithium) critical to the production of batteries,
  • know-how and a qualified workforce to ensure the transformation of these materials,
  • an economy that does not depend on fossil fuel production,
  • a consensus of the political and economic classes on the importance of taking action and, critically

The magnitude of the energy transition challenge should not be underestimated. Because transforming all our buildings, all our transportation and all our industries will not happen without a colossal effort from all sides.

The race to net zero is on. And everyone – in every sector – will need to step up to the plate if we are to win.

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