Good morning.
The Path to Net Zero is no longer just a hazy aspiration; it is becoming increasingly clear. And business leaders like Marco Alverà are showing the way.
Alverà and I met in New York yesterday. His varied career started here, led him through Goldman Sachs, the first internet boom, Italian telecom and energy businesses, and left him as one of the world’s leaders—maybe the world leader—in understanding how to commercialize green hydrogen. (He even wrote the book—see here.)
The former CEO of Snam, an Italian energy infrastructure firm, Alverà now heads something called TES that is building a system that will—bear with me—capture carbon dioxide emissions at a German factory, ship the CO2 to Texas where solar and wind energy will be used to combine it with hydrogen and create green methane (CH4), which can then be shipped back to Germany and used as fuel. The carbon emissions from that fuel get captured, sent back to Texas, and start the process all over again. “We keep it in a closed loop,” Alverà says.
Why make the green methane in Texas? Well, in part because Texas has lots of sun and wind, which can create the cheap green electricity needed to power the process. But also because the Inflation Reduction Act has made the U.S. the cheapest place in the world for manufacturing green methane. As a result, Texas gets a new industry and Germany gets cheap fuel—all courtesy of American taxpayers.
Is the U.S. government okay with billions of tax dollars being used to subsidize fuel for Germany? Alvera says U.S. officials have assured him the answer is yes. Their focus is competing against China to win the green energy future. If Europe benefits (or, next up, Japan), why not? In his view, Europeans should stop complaining about the IRA. It’s their green Marshall Plan.
I asked Alverà how much closer the IRA gets the world to net zero. “It’s gotten us about five years closer,” he says. “It is creating a race to the top. It will prod other nations to act.” That doesn’t mean we will make the 2050 target. But we are getting closer, so take that as a bit of optimism to start your day.
More news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
