EcoPragma Capital’s Liebreich: Total Energy Transition by 2070
Michael Liebreich is an expert on the transition to net-zero. “I didn’t start doing what I do because I’m an environmentalist,” he said. The chairman and CEO of Liebreich Associates and co-managing partner of London-based EcoPragma Capital kicked off TDK Ventures and Climate Investment’s Energy Week 2023 program by advocating for elegant solutions to the world’s environmental challenges. “There’s something fundamentally wrong about processes that create waste, and that waste is not theoretical; it’s very harmful. “We should [be reducing carbon emissions] in a way that is respectful of ourselves, our kids, our future generations, and the planet.”
An acknowledged thought leader on clean energy, mobility, technology, climate, sustainability and finance, he is a member of the United Kingdom’s Taskforce on Energy Efficiency and an honorary fellow of the Energy Institute. He defines elegance as climate solutions that bring “more efficiency, lower cost, and reduced externalities.”
He did not mince words in his interview with TDK Ventures President Nicolas Sauvage.
“Burning stuff is stupid,” Liebreich said. “It makes no sense to have a flame at 2,000° C to heat a house to 21 degrees. That is not elegant. That can’t be the answer. As you go through the whole economy, you can see the inelegance. Two-thirds of primary energy is thermal waste. That’s ridiculous. 40 percent of food is wasted.”
He is confident that the world will achieve net-zero and a fully circular economy.
“Mine is an ecological vision of the economy,” he explained. “Nature has gotten to the point where it recycles everything. It’s smart and circular. I’m optimistic, but clearly, it’s a multi-decade process. In fact, it’s a centuries-long process, going from coal to oil to natural gas to renewables using more high-exergy electricity. And there’s a lot left to do. It’s very capital-intensive, there’s long asset lifetimes, and it’s the biggest challenge conceivable. It’s not just climate. We are talking about other planetary boundaries and biodiversity.”
He said 2070 may be the earliest we can hope to declare total victory. We are not on pace to achieve the UN Climate Change Conference’s goal of limiting the global average temperature increase to 1.5° C above pre-industrial levels by the year 2050. That objective could be doable in Japan and rich countries in Europe and North America, he said. But developing countries that still struggle with energy, food, and housing security have more pressing priorities.
Still, “Ninety percent of the global community has committed to net-zero 2070, two-thirds of it by 2050. If we could deliver that, it would be pretty good,” he said. “I think we can do it, from an engineering, societal, and capital-formation perspective. The thermodynamics make sense.”
To fully achieve the UN’s plan, however, developed countries must first acknowledge that the Global South faces challenges in their path toward electrification and the elimination of fossil fuels, then take steps to alleviate them.
“We all talk about how cheap renewables have become,” Liebreich admonished. “But if you’re in Zambia or Ghana, they are still expensive, because your cost of capital is so high. If you’re in Malawi, or South Sudan, where capital is impossible, these things are not cheap. You’re still going to be using diesel forever, unless something gets fixed. The other side of the justice coin is that we’re all pushing ahead with technologies that require a lot more mining, and we’re not doing nearly enough to make sure that we’re doing that in a just way. We could be all-virtuous — net-zero 2050 in Europe. Fabulous — but we’ve pillaged Papua New Guinea, Bolivia, etc. That’s not a solution.”
Liebreich said the Bridgetown Initiative, which seeks to gain adequate funding commitments for climate action and infrastructure in lower-income countries can accelerate the process. Technological breakthroughs in mining and minerals will also be part of the answer, as will the groundswell of societal awareness and regulatory commitments.
Apart from a growing recycling movement, Liebreich said there are several initiatives in mining and materials science that give him reasons for optimism. One is the efficiency that has been built into EV batteries and other decarbonization technologies. He noted that the first Nissan Leaf was limited to a 70-mile range. Today, that has tripled, “and it has the same amount of stuff in it.”
In addition, he noted that circularity is a lot closer than we think. Advanced processes may be able to recover 95 percent of the cobalt, copper, lithium, and other critical materials after a battery’s 15- or 18-year lifespan. At the same time, the next generation of battery may offer 30 percent greater efficiency. So, the chemicals from the first battery, which were mined in 2015 will last even longer in their second lifecycle.
If you can recycle and get 95 percent of your materials back while in the 15-year or 18-year life of that battery, you’ve become 30 percent more materials efficient, effectively, that piece of mining that you did in 2017 works forever.
Liebreich is also high on the potential of material substitution. He said he has invested in a company that extracts magnesium from seawater. One-third lighter than aluminum, magnesium could provide a viable substitute in EV construction. Lighter weight translates to extra mileage per charge.
And, he said, removing aluminum from vehicle chassis increases the supply that could be used as a substitute for copper. Though aluminum is far less conductive than copper, necessitating thicker wiring and battery housing, its cost and weight are half that of copper.
Liebreich expects the elevation of electrochemistry over thermochemistry to pay dividends in areas such as nitrogen fixation. Electrochemistry is “more elegant because you’re hitting the reaction with a specific packet of energy, not heating everything up, stirring it, grinding it, and hoping for the best,” he said.
Even though “we don’t know what’s down there,” Liebreich said he wouldn’t expect deep-sea mining to create significant environmental problems. He sees it as similar to the introduction of widespread agriculture.
“Was that a big impact? Yes, but we all still live quite well,” he said. “There will be devastation of some vents in the Mariana Trench, but it may not have a huge impact on anything we currently care about. Still, I don’t think we should destroy them. It’s not elegant to destroy things you don’t understand.”
As far as alternative energy, Liebreich said, “the West is uncomfortable with an overreliance on the solar industry and critical minerals. You will see action on that. It won’t be a decoupling, but the next plant to process Australian spodumene into lithium for batteries is more likely to be outside China. The Chinese companies will respond by building facilities in Vietnam or someplace else.”
He believes global trade is an integral ingredient in moving the energy transition forward. And both cooperation and competition are necessary to spark global trade.
“We don’t need tariffs against Chinese dumping, but we will see more of a separation and more geostrategic competition,” he said. “Competition spurs innovation.”
Our next article will report on Liebreich’s view of hydrogen’s role in decarbonization, including an overview of his “hydrogen ladder”.
TDK Ventures and Climate Investment hosted Energy Week 2023 at London’s Goldsmiths’ Centre to highlight the efforts of industry entrepreneurs, investors, and the scientific community in solving the world’s energy challenges and finding sustainable paths to decarbonization.
Energy Week 2023 featured industry leaders, experts, and visionaries, who are shaping the future of the energy landscape to help explore the latest advancements, challenges, and opportunities in sustainable energy solutions.
TDK Ventures Inc. invests in startups to bolster innovation in materials science, energy/power and related areas typically underrepresented in venture capital portfolios. Established in 2019 as a wholly-owned subsidiary of TDK Corporation, the corporate venture company’s vision is to propel the digital and energy transformations of segments such as health and wellness, next-generation transportation, robotics and industrial, mixed reality and the wider IoT/IIoT markets.
Climate Investment is an independent organization founded by members of the Oil and Gas Climate Initiative, specializing in accelerating capital-efficient decarbonization in high-emission sectors. Since 2017, they have curated a portfolio of over 30 innovative technologies and business models, resulting in a cumulative reduction of 57 MT CO2e in greenhouse gas emissions from 2019 to 2022.
