The EU Green Deal promises to create and drive massive investment into clean energy technology, sustainable agriculture, battery recycling and green hydrogen over the next decade.
Many companies – including those from Australia and Canada - stand to benefit and European investors are watching these sectors closely and following deal flow, company announcements and macro-trends.
The EU Green Deal is a package of policy initiatives designed to move the EU towards a green transition and towards a goal of climate neutrality by 2050.
Some of the major policy initiatives include Farm to Fork Strategy, European Industrial Strategy and Clean Affordable, EU Action plan for a Circular Economy and Secure Energy.
The forecast capital expenditure is significant: over 620 billion euros to meet the objectives of the EU Green Deal and its REPowerEU plan.
This massive investment to achieve net zero by 2050 will flow through sectors and likely benefit global companies with operations in Europe, such as:
Provaris Energy Ltd (ASX: PV1; FSE: WS90)
Provaris Energy is an Australian based company and a developer of unique, safe, and energy-efficient integrated hydrogen supply chains for regional markets in Asia and Europe.
Provaris Eneregy’s competitive advantage is the intellectual property developed for hydrogen storage and transport of ‘compressed’ green hydrogen, which utilises the proven technology of compression This includes the proprietary design of bulk-scale hydrogen carriers (H2Neo & H2Max) and barge storage solutions (H2Leo).
The European Commission sees hydrogen as a cornerstone of its clean energy policy and has proposed a strategy aiming to accelerate the development of green hydrogen from renewables so that it becomes part of the region’s energy supply by 2050.
In 2023 the EU Commission said “Hydrogen plays a key role in our European Green Deal and in the REPowerEU plan. Upscaling the use of renewable hydrogen, ammonia and other derivatives will accelerate the decarbonisation of our energy system and reduce the EU’s dependence on Russian imported fossil fuels”.
The EU is planning to produce 10 million tonnes of its own green hydrogen by 2030 but will still need to import another 10 million tonnes. It is likely this will be imported from countries close by such as Norway with abundant renewable energy.
One of the big question marks around Hydrogen has been how to transport it effectively and efficiently.
There are three main methods for hydrogen storage and transportation – compressed, liquified and as a solid such as ammonia. The major problems with shipping green hydrogen as ammonia or as a liquid is the substantial energy loss (around 50%) compared to Provaris Energy’s compressed hydrogen solution of around 20% energy loss.
Stakeholders in the Hydrogen value chain are already seeing the possibilities of Provaris’ compressed hydrogen solution.
An example is Norwegian Hydrogen – a privately owned Norwegian company with a vision to produce green hydrogen and ship to vessels sailing through the fjords. The missing link in this process was efficient transportation and this is likely to be provided by Provaris Energy. The two companies are collaborating on the 270MW FjordH2 project, Norway’s largest production facility for green hydrogen – a large scale facility with a production capacity of 40,000 tonnes of green hydrogen annually.
In August 2023, Norwegian based Prodtex AS was awarded a contract to design, construct and test a prototype scaled compressed hydrogen tank together with marine classification societies ABS and DNV, and SINTEF, Norway’s leading independent research organization. A joint venture company will also be established to develop an innovative hydrogen tank production facility providing hydrogen cargo tanks for Provaris initial fleet of H2Neo carriers and H2Leo storage barges, and small-scale tanks for onshore storage applications.
Provaris Energy have said their shipping could store 300 to 600 tonnes of hydrogen at a capital cost of €133,000 to €200,000 a tonne compared to €600,000 to €1,300,000 a tonne for high-pressure storage onshore.
The European investment in green hydrogen is massive and can only have flow through benefits to companies such as Provaris Energy. An example is the recently announced EU funding of 17 billion euros for 80 hydrogen projects across the EU.
A significant value inflection point for green hydrogen and companies in the sector arrived in October 2023, with EU member states agreeing that 42% of hydrogen used by industry must be renewable by 2030.
Provaris Energy looks ideally placed to benefit from the surge of investment into green hydrogen and its associated transport and storage.
ClearVue Technologies Ltd (ASX: CPV; FSE: CKJ)
ClearVue Technologies is an Australian based smart buildings material company developing advanced, solar glazing technology solution to generate power on site, improve a building’s energy efficiency and reduce overall carbon emissions of the built environment.
ClearVue looks to be perfectly placed as the global efforts to reach climate neutrality crate a push for increased energy efficiency of buildings, lower Co2 emissions and increased use of renewable energy.
The Company has developed a patented nano-particle interlayer to activate Ultraviolet and infrared light as it passes through glass. This reaction deflects the radiation to the edge of the window so the energy can be harvested by solar cells within the frame of an Insulated Glass Unit (ISU).
The technology has multiple applications such as within a window, skylight, curtain wall and greenhouses.
The EU has previously advised buildings are the single largest energy consumer in Europe, using 40% of EU energy consumption and creating 36% of all EU greenhouse gas emissions.
Th EU Commission has proposed by 2030 all new building must be zero-emission and all new public buildings must be zero emission by 2027. This will require buildings that consume very little energy, are likely powered by renewable energy, and emit no onsite carbon emissions from fossil fuels.
ClearVue recently demonstrated their Building-Integrated-Photovoltaics (BIPVs) can be produced on mass production lines without the need for glass manufacturers to make changes to their standard lines – ensuring a lowers cost product for end-customers. The Company has stated they are currently in discussions with multiple manufacturing licence partners globally.
This licence model of revenue generation for ClearVue should enable the Company to scale quickly without significant infrastructure investment requirements, headcount, and operational costs.
A major platform of the EU Green Deal is the REPowerEU plan introduced in May 2022. This plan builds on the Fit for 55 proposals aiming to achieve at least a 55% net greenhouse gas emissions result by 2030. The use of solar energy will be a vital component the RePowerEU objective. The scale of investment is substantial with up to €20 billion in new grants and up to €225 billion in loans.
Bringing more Photovoltaic energy online will be crucial part of the REPowerEU objectives and the EU is committed to accelerate the deployment of solar technologies with a goal to have 320 GW of solar photovoltaic by 2025 and 600 GW by 2030, creating plenty of opportunities for companies such as ClearVue to be involved and contribute.
Recently ClearVue demonstrated the company’s ability to generate energy from a clear window in Luxembourg. Attending were a group of major construction company CEOs plus Luxembourg’s Minister of the Economy, Franz Fayot and Minister of Energy, Claude Turmes.
ClearVue technology can transform a glass building into a massive solar panel, generating power where it's needed, reducing power transmission requirements across large distances. Buildings will be transformed under the company’s vision so that glass is no longer be just a component of construction but also a renewable energy resource.
Neometals Ltd (ASX: NMT; FSE: 9R9)
One area which is strongly highlighted by the EU Green Deal is battery recycling – a key component of a truly circular economy.
This year the EU Batteries Regulation was adopted by the EU Parliament. This regulation is the first EU regulation taking a full life-cycle approach in which sourcing, manufacturing, use, and recycling are addressed and enshrined in a single law.
The Companies set to benefit will be those with first mover advantage in battery recycling technology – such as Australian based Neometals Ltd.
The EU Battery Regulation outlines that at least 50% of lithium in waste batteries should be recovered by 2027 and 80% by 2031. Also there will be mandatory levels of recycled content for EV batteries produced or sold within the EU. By 2030 every electric vehicle battery sold within the EY must contain the following levels of recycled content: 16% cobalt, 85% lead, 4% lithium and 4% nickel.
Neometals Ltd and its German Joint venture partner, SMS Group, have created a JV company – Primobius – to commercialise, licence and develop evbattery recycling plants globally.
Primobius has developed a two-step process for recycling lithium-ion batteries (LIB), using a combination of efficient and low carbon mechanical and hydrometallurgical processes. The first demonstration plant at Hilchenbach, Germany is now operating and producing intermediate mixed nickel/cobalt product (“Black Mass”). A typical LIB contains approximately 48% Black mass of which Primobius is recovering at high levels and selling to several global offtakers on a spot basis.
The Primobius technology received a massive global validation when it was selected by Mercedes Benz AG to be the technology partner for its battery recycling factory being built at Kuppenheim in Germany.
Mr. Jörg Burzer, Member of the supervisory Board of Management of Mercedes-Benz Group AG said at the laying of the foundation stone for the plant said “Mercedes-Benz is pursuing a clear goal: as complete a circular economy as possible for all raw materials used. Sustainable battery recycling is a key factor in this”.
In a trial in 2023 for a new lithium extraction process, recoveries exceeding 93% lithium were achieved precipitating lithium fluoride (LiF) together with purity of 95%. Primobius has received strong interest in its LiF product from the lithium electrolyte supply chain and will provide samples for global customers.
The LIB recycling requirements of the EU Battery Regulations were easily met with outstanding trials results yielding recoveries greater than 95% for nickel, cobalt.
Neometals is a global leader in leveraging proprietary technologies to establish circular and sustainable supply chains for critical battery metals ensuring a lower reliance on traditional mining methodologies and supporting the global energy transition. The company is well positioned to scale up through existing joint ventures and partnerships and become a significant player in the circular battery materials supply chain.
Wide Open Agriculture (ASX: WOA; FSE: 2WO)
As part of the EU Green Deal, over 10 billion euros will be dedicated to a Farm to Fork Strategy. Comprising 27 key actions areas, the strategy aims to transition the EU towards a healthier, more sustainable food system and protecting biodiversity.
These are the very same goal and ambitions of an Australian based company – Wide Open Agriculture (WOA). The company is Australia’s leading regenerative food and agriculture company is backed by major shareholder the Netherland’s based, Commonland Foundation.
Animal agriculture accounts for around 17% of carbon emissions in the EU and EU policy initiatives are being firmly directed towards reducing this such as increasing the practice of regenerative agriculture and supporting increase in production and consumption of plant-based foods.
Wide Open Agriculture has developed a globally patented plant-based protein product – Buntine Protein – made from lupins. Lupin seeds are a type of legume and increasingly seen as a “superfood” with significantly more plant protein than quinoa, more fibre than oats and three times as much antioxidants as berries, three times as much potassium than bananas and more iron than kale.
In October 2023, the Company announced a game-changing acquisition to acquire the business assets of ProLupin GmbH – a leading European lupin protein producer based in Grimmen, Germany. This provides Wide Open Agriculture immediate commercial scale manufacturing capabilities in Europe.
The German facility will focus on a Business-to-Business centric approach and leveraging ProLupin’s already established network in the European plant based dairy market to supply global ingredient and food manufacturing companies.
The Company has also secured two exclusive Distribution Agreements in the United States to promote and establish a commercial market for Buntine Protein. The US market is considered a huge opportunity due to its leadership in plant-based protein innovation, consumption levels, considerable purchasing power and immense potential for growth.
In Australia, Wide Open Agriculture also has significant regenerative food brand “Dirty Clean Food” which includes branded products as Oat Milk and dairy products. These are stocked across Australia with major retailers such as Woolworths.
The Company is committed to the goals and processes of regenerative agriculture – highlighted by the EU Green Deal as being a vital component of assisting drive down CO2 emissions from farming and agriculture. This is likely to attract considerable interest from impact investors and stakeholders in the plant-based protein sector in the near term.
These 4 companies - Wide Open Agriculture, Neometals, Provaris Energy and ClearVue Technologies all are working in different sectors but with similar goals - assist the EU where possible reduce Co2 emissions, increase circular economy, increase energy efficiency and reduce reliance on fossil fuels and assist decarbonise the planet.