The writer is managing director of AP Møller-Maersk
The map of global green energy production for the future is being drawn, and the United States has established a significant milestone.
Amid an energy crisis exacerbated by the invasion of Ukraine, President Joe Biden’s Cut Inflation Act provides groundbreaking $369 billion in climate and energy funding, in addition to $110 billion in funding already committed to climate investments last year. This is expected to unlock over $1 billion in combined climate-related investments.
With the IRA, Americans have put themselves ahead of the race to become the world leader in green power generation and have given the transition to renewables a much-needed boost. The legislation is not perfect in all its details. But as the NASA saying goes, “Perfect is the enemy of good.”
Given the daunting task ahead of us, this is the mindset we need. We don’t have time to wait for everything to be perfect.
Increasing green energy production and making it price competitive is a big challenge. By providing an attractive business case for private and public partnerships, the ERI can help us solve this problem through significant investment in a full suite of low-carbon technologies. Boston Consulting Group analysis shows that with the groundbreaking incentives included in the law, the cost of solar power can be halved and onshore wind power prices lowered by more than 60%.
At AP Møller-Maersk, we operate over 700 large container ships and 68 container terminals, as well as 3.2 million square meters of warehousing. Every year, we carry out nearly 5 million container movements on rail, trucks and barges. We consume large amounts of energy, and in our ships alone we burn nearly 12 million tons of fossil fuel per year.
Nevertheless, we want to be climate neutral by 2040 and achieve significant emission reductions by 2030. This will require a full shift from fossil fuels to green fuels.
To achieve this, we need a market for a green fuel such as e-methanol. We need access to many cost-effective renewable energy sources to produce the hydrogen needed for e-fuels and ensure an attractive fuel price for our customers. And we need new energy infrastructure — one that doesn’t currently exist. So when we see an “open for business” sign in the United States, we pay attention.
Industry leaders must help chart the way forward. We seek strong partnerships and investment opportunities to create the market on the global scale required, and potentially to become directly involved in renewable energy generation such as wind and solar to produce our green fuels.
I am convinced that green fuels based on hydrogen will evolve in the future and that prices will eventually come down when that happens. The Americans have laid the foundations by displaying a desire to invest in the development of an attractive territory for this market, ahead of the rest of the world.
For years, Europe has liked to think of itself as the world leader in the fight against climate change. But the United States is now in charge.
I hope that this American decision can serve as a green catalyst for the rest of the world. Imagine a green “race to space” in which regions and nations jostle to create the best conditions for an accelerated energy transition.
Of course, in a race, someone will finish first – but in the end, we will all be winners in a global political environment that promotes faster decisions, encourages green investments and enables businesses to embark on meaningful transitions. The result will be greater innovation, large-scale production, and the building of the green energy infrastructure that is so sorely lacking today.
Acting on climate change and moving away from fossil fuels is a global challenge, but it also comes with global opportunities. The US government has sent a clear signal with its commitment to partnering with companies that are ready to invest in a green future. Europe, China, the Middle East, India and others are expected to follow suit with their own ambitious investment plans.
Despite the turmoil in the world right now, we must remember that we are in a climate emergency, and we must act now to make meaningful progress before 2030. The United States has called on the rest of the world to join the race for a green future, but the good news is there’s room for more than one favorite. If we want to go far, we have to go together.